According to the Company’s management, the reason for this is the wrong cost estimation spent on the modernization of the pellet plants in Wawa and Antikokan, Ontario. These measures are implemented under the terms of a long-term contract for the delivery of pellets to the electric power station in Antikokan.
The electric power station in Antikokan used coal as fuel but last year it was converted for pellet combustion. The supplying companies are Rentech Company and the Resolute Forest Products Company, which supply up to 45000 tonnes of pellets annually. The output of Wawa plant will be destined for export. The management of the Company has already concluded a ten-year contract for the delivery of wood pellets comprising the volume of 400 thousands of tonnes annually. The customer is Drax Group, the British power producer.
At the headquarters of the Rentech Company located in Los Angeles, it was announced that the line of credit provided by the partners has been increased to 63 millions of dollars. The greater part of these means will be directed to complete the reconstruction valued at 130 millions of dollars instead of 105 millions of dollars estimated earlier. According to this declaration, the plant in Antokokan has not stopped working and discharges its responsibilities for the delivery of pellets to Ontario Power Generation under the terms of a ten-year contract on 45000 millions of tonnes annually.
Keith Forman, the chief executive officer in his declaration expressed his deep sense of gratitude to GSO Capital Partners Company for the provided financial support owing to which the project will be completed within the time limit. According to his words, it is going to be a good welcome sign for the potential investors.
Neal Kelly, the representative of Ontario Power Generation has announced that his management does not entertain any doubts over the ability of Rentech to meet a delivery schedule.
