Rentech Cuts Staff, R&D OperationsThursday, February 28, 2013
Alternative energy developer Rentech Inc. said Thursday that it would dramatically scale back its research and development operations, closing a demonstration facility in Colorado and laying off staff.
The West L.A. company, which has been developing synthetic and renewable jet and diesel fuel based on biomass conversion, said it would close its product demonstration unit in Commerce City, Colo. It also said 65 employee and contractor positions would be cut from its alternative energy unit. The company, which in earlier regulatory filings reported 265 employees, did not say if any of the positions to be cut were in Los Angeles.
Rentech said it planned to focus on more immediate growth opportunities within the energy industry that do not rely on new technologies. It will attempt to sell the Colorado facility, as well as approximately 450 acres of land in Natchez, Miss., originally acquired for the development of an alternative energy facility. Closing the Colorado operation is expected to reduce the company’s research expenses to $10 million this year from $21 million last year.
“While our elimination of these positions is a difficult decision, today’s actions will further position Rentech to drive value for shareholders by cutting R&D spending and focusing on businesses that generate strong returns, with ready markets and certainty of revenue,” Chief Executive D. Hunt Ramsbottom said in a statement. “The investments we are considering have either immediate or near-term profitability, and will meet our disciplined investment criteria.”
The company has taken several actions in recent years to increase shareholder value. In 2011, it spun off a 40 percent stake in its profitable nitrogen fertilizer unit, Rentech Nitrogen Partners LP, which currently trades at $41 a share.
Rentech shares closed up 10 cents, or nearly 4 percent, to $2.73 on the New York Stock Exchange.