Friday, January 4, 2008

BVI-based Sherwood offers to purchase Rentech

Sherwood Investment Overseas, an investment fund registered in the British Virgin Islands, has confirmed its previously stated interest in Rentech, Inc. by offering to buy the coal-to-liquid tech company, - but for the slashed price. The BVI fund sent a letter to Rentech informing about his wish to buy the company for $372.3 million, that is $2.28 per share.

According to the BVI investment fund, it already owns 5.3 million Rentech shares, or 3.2% of outstanding shares. Sherwood Investment Overseas Fund manages the money of an anonymous European family. The Los-Angeles company Rentech develops coal-to-liquid technology which turns coal into liquid fuel – a way to reduce dependency on foreign oil.

Previously Sherwood mentioned a higher offer that did not result in a deal. In November, the fund sent a letter to Rentech in which it said it "would be willing to put together a proposal at $2.70 per share to take the company private." Julian M. Benscher, the authorized signatory of Sherwood, told that the fund lowered its offer to reflect write-offs announced in the Rentech's quarterly earnings report. He also said that the BVI fund would finance a Rentech acquisition through a combination of its funds and other financing.

On Tuesday, Rentech closed with a market capitalization of $297.1 million. The question is whether Sherwood would be able to raise additional capital to fund Rentech's future projects, which estimate more than a billion dollars each.

The BVI fund Sherwood Investments Overseas is also trying to purchase Trans World Entertainment; in November the company announced a $7-per-share offer.