Rentech Buys Royster-Clark Fertilizer Plant

NEW YORK - Nov 7/05 - SNS -- Rentech Development Corporation has agreed to buy all issued and outstanding shares of Royster-Clark Nitrogen, Inc., the owner of a 830-ton per day natural gas-fed nitrogen fertilizer plant in East Dubuque, Illinois.

The transaction is conditioned upon RDC's ability to secure financing, approval by Rentech, Inc.'s stockholders, the continued absence of anti-trust hurdles and other customary matters.

The companies intend to close the transaction as quickly as possible, and the agreement provides that if RCI has satisfied its closing requirements and the agreement terminates under circumstances in which (i) RDC has not obtained its financing, (ii) AMEX has not approved the listing of shares of stock of Rentech, Inc. that it intends to issue to raise a portion of that financing or (iii) Rentech, Inc.'s stockholder approval has not been obtained, then RCI will receive a US$2.5 million payment.

RDC will pay $50 million for the outstanding shares of common stock of Royster-Clark Nitrogen, Inc., plus an amount equal to net working capital at closing. Rentech plans to convert the fertilizer plant from natural gas to coal-fed gasification using Illinois coal. The new expanded gasification process will generate the synthesis gas necessary to increase the nitrogen fertilizer production. RDC estimates that it will take approximately three and one-half years to convert the plant from natural gas to coal feedstock.

In addition, RDC and Royster-Clark Resources LLC (RCR), a subsidiary company of RCI, have agreed to the terms of a Distribution Agreement appointing RCR as RDC's exclusive distributor for the sale, purchase and resale of anhydrous ammonia, UAN solutions, nitric acid and granular urea manufactured at the plant for agricultural and industrial use in the US. RCI, headquartered in Norfolk, Virginia, is one of the nation's largest retailers of fertilizer products, carrying a broad line of agricultural products and providing services to farmers.