- Initial loan proceeds of $782
million expected to be funded this month and balance of
proceeds funded through planned construction period
- DOE loan guarantee facilitates expansion of Sustainable
Aviation Fuel capacity to 300 million gallons per year
INDIANAPOLIS, Jan. 10,
2025 /PRNewswire/ -- Calumet, Inc. (NASDAQ: CLMT)
("Calumet," "we," "our" or "us") announced today the closing of a
$1.44 billion guaranteed loan
facility with the U.S. Department of Energy ("DOE") Loan Programs
Office ("LPO"). The loan will fund the construction and expansion
of the renewable fuels facility owned by Montana Renewables, LLC
("Montana Renewables" or "MRL"), an unrestricted subsidiary of
Calumet.
The expansion positions Montana Renewables as one of the largest
Sustainable Aviation Fuel ("SAF") producers globally, enabling an
increase in annual production capacity to approximately 300 million
gallons of SAF and 330 million gallons of combined SAF and
renewable diesel ("RD"). The planned expansion includes several key
components: a second renewable fuels reactor (allowing
approximately half of the 300-million-gallon SAF capability to be
online by 2026), debottlenecking of existing units, installation of
SAF blending and logistics assets, increased renewable hydrogen
production, cogeneration for renewable electricity and steam, and
on-site water treatment and recycling capabilities.
"This is essentially the largest agricultural investment in
Montana history and will double
our purchases of seed oils and tallow from approximately 1.5
billion pounds per year today to 3 billion pounds per year post
expansion. This is possible through the strong support and
partnership of DOE and follows over two years of detailed due
diligence," said Bruce Fleming, CEO
of Montana Renewables. "Our MaxSAF expansion drives regional
economic development by creating jobs, supporting the broader
agricultural industry, and positioning the State of Montana as a global leader in
renewable fuels in a practical and highly economic way with
technology that we have developed and derisked here in the United States."
"This investment is a pivotal catalyst for Calumet," said
Todd Borgmann, CEO of Calumet.
"Following our conversion to a C-Corporation, we emphasized the
importance of the DOE loan as the next major step in Calumet's
vision, and achieving that milestone is a tremendous
accomplishment. As Montana Renewables grows from a first mover and
innovator in SAF to become one of the largest independent producers
in the world, this business continues to competitively position
itself for success, which is a critical piece of Calumet's strategy
to deliver ongoing shareholder value."
Loan Guarantee Structure
The loan guarantee is structured to release a first tranche of
approximately $782 million to fund
eligible expenses previously incurred by MRL. Simultaneous with the
expected first tranche funding, Calumet expects to make an
additional $150 million equity
investment with funds that it currently holds. The balance of the
guaranteed loan proceeds is held in a delayed draw construction
facility, and MRL expects this second tranche to be disbursed
during construction beginning in 2025 through the anticipated
completion of the MaxSAF project in 2028. Disbursements under
the guaranteed loan facility are subject to the satisfaction of
certain commercial, technical, and legal conditions precedent.
During construction, retained earnings from MRL are expected to
supplement DOE funds to maintain debt at 55% of capitalization
during the MaxSAF™ construction sequence. The loan
has a 15-year tenor and an annual interest rate at the U.S.
Treasury rate plus 3/8%. Servicing of principal and interest will
be deferred until MaxSAF™ is commissioned.
Regional Development
An economic impact study1 produced by the
University of Montana Bureau of
Business and Economic Research (BBER) measured the substantial
benefit to Montana in the form of jobs, income,
government revenues, economic output and population. For example,
by 2028, the economic footprint of the Great Falls site
is expected to support a population of 4,400 Montanans, consisting
primarily of working-aged families and their children.
MRL expects the expansion to catalyze additional regional
development, particularly for renewable feedstocks sourced from
farms and ranches. By driving local infrastructure development in
transportation, agricultural and energy related businesses similar
to the Minnesota SAF Hub, MRL will create a large-scale,
end-to-end SAF industry comprised of public and private partners
in Montana and the Pacific Northwest.
The MRL expansion is expected to create 450 construction jobs
and up to 40 operations jobs.
About Montana Renewables
Montana Renewables is a
leading renewable fuel company located in Great Falls, Montana. MRL produces Sustainable
Aviation Fuel, Renewable Diesel, Renewable Hydrogen and Renewable
Naphtha. As the largest SAF producer in North America (2024), MRL is dedicated to
meeting the increasing demand for sustainable fuels and to
supporting a greener future. As a Great
Falls business leader, MRL offers high-paying jobs and
career opportunities while supporting the local economy and
contributing to the community's overall well-being. Pacific
Northwest farm and ranch operations ultimately provide MRL with
sustainable, renewable, low-carbon feedstocks and agricultural
byproducts including tallow, distillers corn oil, canola oil, used
cooking oil and camelina oil. These feedstocks are converted to
renewable transportation fuels which have lower emissions compared
to conventional fossil fuels. MRL is an unrestricted subsidiary of
Calumet, Inc.
About Calumet
Calumet, Inc. (NASDAQ: CLMT)
manufactures, formulates, and markets a diversified slate of
specialty branded products and renewable fuels to customers across
a broad range of consumer-facing and industrial markets. Calumet is
headquartered in Indianapolis,
Indiana and operates twelve facilities throughout
North America.
Cautionary Statement Regarding Forward-Looking
Statements
Certain statements and information in this press
release may constitute "forward-looking statements." The words
"will," "may," "intend," "believe," "expect," "outlook,"
"forecast," "anticipate," "estimate," "continue," "plan," "should,"
"could," "would," or other similar expressions are intended to
identify forward-looking statements, which are generally not
historical in nature. The statements discussed in this press
release that are not purely historical data are forward-looking
statements, including, but not limited to, the statements regarding
(i) our expectations regarding the funding of the loan facility
(the "DOE Facility") that MRL received from the DOE LPO, including
the timing and intended use of borrowings under such facility, (ii)
our expectation that the DOE Facility will enable MRL to complete
the MaxSAF™ construction and that such project will be
completed on time and on budget, (iii) our expectation regarding
our business outlook and cash flows, including with respect to the
Montana Renewables business, and (iv) our ability to meet our
financial commitments, debt service obligations, debt instrument
covenants, contingencies and anticipated capital expenditures.
These forward-looking statements are based on our current
expectations and beliefs concerning future developments and their
potential effect on us. Our forward-looking statements involve
significant risks and uncertainties (some of which are beyond our
control) and assumptions that could cause our actual results to
differ materially from our historical experience and our present
expectations or projections. Known material factors that could
cause actual results to differ materially from those in the
forward-looking statements include, but not limited to: the overall
demand for renewable fuels, including SAF and RD; our ability to
produce renewable fuel products that meet our customers' unique and
precise specifications; the marketing of alternative and competing
products; the impact of fluctuations and rapid increases or
decreases in renewable fuel margins, including the resulting impact
on our liquidity; our ability to comply with financial covenants
contained in our debt instruments; labor relations; our access to
capital to fund expansions, acquisitions and our working capital
needs and our ability to obtain debt or equity financing on
satisfactory terms; environmental liabilities or events that are
not covered by an indemnity, insurance or existing reserves;
maintenance of our credit ratings and ability to receive open
credit lines from our suppliers; demand for various feedstocks and
resulting changes in pricing conditions; fluctuations in refinery
capacity; our ability to access sufficient feedstocks; the effects
of competition; continued creditworthiness of, and performance by,
counterparties; the impact of current and future laws, rulings and
governmental regulations shortages or cost increases of power
supplies, natural gas, materials or labor; weather interference
with business operations; administration changes in the federal
government and potential legislative enactments and administrative
actions; our ability to access the debt and equity markets;
accidents or other unscheduled shutdowns; and general economic,
market, business or political conditions, including inflationary
pressures, instability in financial institutions, general economic
slowdown or a recession, political tensions, conflicts and war
(such as the ongoing conflicts in Ukraine and the Middle East and their regional and global
ramifications).
For additional information regarding factors that could cause
our actual results to differ from our projected results, please see
our filings with the SEC, including the risk factors and other
cautionary statements in the latest Annual Report on Form 10-K of
Calumet Specialty Products Partners, L.P. (the "Partnership") and
other filings with the SEC by Calumet, Inc. and the
Partnership.
We caution that these statements are not guarantees of future
performance and you should not rely unduly on them, as they involve
risks, uncertainties, and assumptions that we cannot predict. In
addition, we have based many of these forward-looking statements on
assumptions about future events that may prove to be inaccurate.
While our management considers these assumptions to be reasonable,
they are inherently subject to significant business, economic,
competitive, regulatory and other risks, contingencies and
uncertainties, most of which are difficult to predict and many of
which are beyond our control. Accordingly, our actual results may
differ materially from the future performance that we have
expressed or forecast in our forward-looking statements. Readers
are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made. We
undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise, except to
the extent required by applicable law. Certain public statements
made by us and our representatives on the date hereof may also
contain forward-looking statements, which are qualified in their
entirety by the cautionary statements contained above.
1
https://www.bber.umt.edu/pubs/Econ/Calumet-Impact-Report.pdf
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SOURCE Calumet, Inc.