- Initial loan proceeds of $782
million funded today
- Balance of proceeds to be funded during planned expansion from
2025 through 2028
- DOE loan guarantee facilitates expansion of Sustainable
Aviation Fuel capacity to 300 million gallons per year
INDIANAPOLIS, Feb. 18,
2025 /PRNewswire/ -- Calumet, Inc. (NASDAQ: CLMT)
("Calumet," "we," "our" or "us") announced today that Montana
Renewables, LLC, an unrestricted subsidiary of Calumet ("Montana
Renewables" or "MRL"), has received its first drawdown of
approximately $782 million from its
$1.44 billion guaranteed loan
facility with the U.S. Department of Energy ("DOE") Loan Programs
Office ("LPO"). The loan funds the construction and expansion of
the renewable fuels facility owned by Montana Renewables.
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
modular components, which will provide the ability to increase
capacity and reduce costs. The most important component is a second
renewable fuels reactor, which will allow approximately half of the
300-million-gallon SAF capability to be online by 2026.
"DOE's mission includes technology and domestic energy
security. MRL delivers both," said Bruce Fleming, CEO Montana Renewables. "Over the past three
years DOE's Loan Program Office conducted a rigorous due diligence
process supported by experts in technology, markets, law,
underwriting, and risk, and MRL qualified on the merits. The
incoming administration took time to verify this and we appreciate
the office's thoroughness. Today we are pleased to continue leading
Montana's largest biofuels investment and look forward to our
continued collaboration with the LPO on the success of this
project."
"Montana Renewables has been at the cutting edge of a rapidly
developing biofuels market since its inception," said Todd Borgmann, CEO of Calumet. "MRL proved
itself as an early mover in large scale SAF production, and now we
are proud to be the first project to receive the support of our new
Administration. I thank the entire DOE team for its continued
commitment to supporting this practical and rapidly growing form of
aviation fuel and for taking the time to ensure our nation's
investments are prudent ones. The expansion of Montana Renewables
into one of the world's largest SAF producers is an
exceptional opportunity for regional agriculture, Montana business
development, our employees and our shareholders."
Loan Guarantee Structure
The loan guarantee is structured in two tranches, with the first
tranche of approximately $782 million
released to fund eligible expenses previously incurred by MRL.
Simultaneous with the first tranche funding, Calumet made an
additional $150 million equity
investment with cash on hand. The balance of the guaranteed loan
proceeds of up to approximately $658
million is expected to be disbursed through 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 second tranche
under the loan facility (the "DOE Facility") that MRL received from
the DOE LPO and the intended use of borrowings under such facility,
(ii) our expectation that the DOE Facility will enable MRL to
commission its second renewable fuels reactor by 2026, complete the
MaxSAF™ construction by 2028 and that each phase of 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.
