Warburg Pincus investment values Montana Renewables at USD 2.25bn
The Great Falls facility. Source: Montana Renewables, LLC.
Montana Renewables LLC (MRL) has become fully capitalised through a couple of new transactions, including a preferred equity investment that values the US renewable fuel business at about USD 2.25 billion (EUR 2.21bn).
New York-based growth investor Warburg Pincus LLC has poured USD 250 million into Montana Renewables in the form of a participating preferred equity security, as announced on Friday by MRL’s parent, Calumet Specialty Products Partners LP (NASDAQ:CLMT). This investment grants Warburg Pincus a seat on MRL's four-member board of managers.
In the meantime, Stonebriar Commercial Finance LLC, which previously made a USD-50-million commitment to MRL, has now spent an additional USD 350 million through a pair of sale and leaseback contracts. These transactions carry a roughly 12.3% cost of capital and offer certain strategic early termination options, Calumet noted.
Concurrently, a USD-300-million convertible investment from Oaktree Capital Management LP in MRL has been retired.
Montana Renewables is currently modifying existing assets at the Great Falls facility in its home state to process up to 15,000 barrels per stream day of renewable feedstocks into Renewable Diesel (RD) and Sustainable Aviation Fuel (SAF), as well as other low-emission sustainable alternatives to fossil fuel products.
"Today's announcement of increased capitalisation further solidifies MRL's go-forward business plan to increase capacity in 2024-25 to an estimated 18,000 barrels per day, including the optionality to convert a large portion of the plant's production from RD to SAF,” said Bruce Fleming, EVP Montana Renewables and Corporate Development.