Tulsa-based Syntroleum will cease trading shares on Friday (June 6) as the company’s stakeholders approved the sale of its assets to Iowa-based Renewable Energy Group in a deal worth an estimated $34.83 million.
Syntroleum received 3,493,613 shares of REG common stock in the deal. Renewable Energy shares closed Tuesday at $9.97, up 1.42% on the day. Syntroleum also filed its intent to delist from the NASDAQ Capital Market effective June 6.
Syntroleum CEO Edward Roth accepted employment with REG and Susan Power, chief financial officer, will be responsible for winding down the operations of Syntroleum.
“We are very pleased to bring new advanced biofuel technologies into the REG portfolio of products that will expand our biomass-based diesel business and launch us into new customer segments,” Daniel Oh, president and CEO of Renewable Energy Group, said in a statement. “We welcome the newest members of our team in Tulsa to REG Synthetic Fuels.”
The approval of Syntroleum’s asset sale clears the way for Tyson Foods to unload its 50% interest in Dynamic Fuels, a $65 million deal that was announced May 21. Syntroleum and Tyson joined forces in 2007 to build a renewable fuels plant in Geismar, La., that turns low grade chicken fat into renewable diesel. The $150 million plant was completed in 2010 and has failed to live up to its potential 175 million gallons of production.
The plant has sat idle since November 2012, with each partner spending $1 million per month to keep it in standby mode.
“Selling our interest in Dynamic Fuels to REG provides capital for Tyson to redeploy into other opportunities,” said Andrew Rojeski, vice president-Renewable Energy for Tyson Foods. “REG is a long-term customer of ours, buying fats, oils and greases to make renewable fuel, and we hope to continue that relationship.”
If the deal is completed between Tyson and REG the payout would come in three ways and would include a release of Tyson’s liability on the outstanding debt used to build the plant. Tyson would receive $18 million in cash at closing with $35 million in future payments which are tied to production over 11.5 years. Tyson also wants to collect $12 million at closing for outstanding loans made to Dynamic Fuels.