Calumet Reveals Series of Transactions at Montana Renewabl
8/05 8:47 AM
Calumet Reveals Series of Transactions at Montana Renewables OAKHURST, N.J. (DTN) --- Calumet Specialty Products Partners, L.P. today announced Warburg Pincus, a leading global growth investor, has agreed to invest $250 million in Montana Renewables LLC in the form of a participating preferred equity security, which values MRL at a pre-commissioning enterprise value of $2.25 billion. The preferred equity investment is not interest-bearing and carriers certain minimum return thresholds. In connection with the investment, Warburg Pincus will have a representative on MRL's four-member board of managers. Calumet also announced that Stonebriar Commercial Finance has invested an additional $350 million through a pair of sale and leaseback contracts on top of its existing $50 million commitment to MRL. The sale and leaseback transactions carry an approximate 12.3% cost of capital and offer certain strategic early termination options. Concurrent with these transactions, the $300 million convertible investment from Oaktree Capital Management L.P. in MRL has been retired. Today's transactions are accretive in the aggregate. MRL's pro forma liquidity, after giving effect to these transactions, is approximately $300 million. Once fully operational, Montana Renewables, based in Great Falls, Montana, will use waste feedstocks to produce low-emission alternatives that directly replace fossil fuel products including renewable hydrogen, renewable diesel and sustainable aviation fuel. RD and SAF created by catalytic hydroprocessing of renewable feedstocks significantly reduce the carbon footprint of hard to electrify industries. "This investment will accelerate our mission to quickly produce low-emission alternatives that directly replace fossil fuel products. We are pleased to partner with Warburg Pincus, a world class institutional investor, as well as to extend our longstanding multi-site relationship with Stonebriar," said Bruce Fleming, EVP Montana Renewables and Corporate Development. "We would also like to extend our gratitude to Oaktree for their initial investment in MRL. Oaktree's alignment and support of our vision allowed the launch of this business in 2021. Today's announcement of increased capitalization further solidifies MRL's go-forward business plan to increase capacity in 2024-2025 to an estimated 18,000 barrels per day, including the optionality to convert a large portion of the plant's production from RD to SAF." (c) Copyright 2022 DTN, LLC. All rights reserved.
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