8-K
Calumet, Inc. /DE (CLMT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 16, 2024
CALUMET, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-42172 | 36-5098520 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
1060 N Capitol Ave
Suite 6-401
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (317) 328-5660
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | CLMT | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 | Regulation FD Disclosure. |
|---|
On October 16, 2024, Calumet, Inc. (the “Company”) issued a press release announcing that the U.S. Department of Energy Loan Programs Office has awarded a conditional commitment (the “Conditional Commitment”) for a loan guarantee of up to $1.44 billion to fund the construction and expansion of the renewable fuels facility owned by Montana Renewables, LLC (“MRL”), an unrestricted subsidiary of the Company. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
On October 22, 2024, MRL published an investor presentation related to the Conditional Commitment. A copy of the investor presentation is attached hereto as Exhibit 99.2 and incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit<br>Number | Description |
|---|---|
| 99.1 | Press Release dated October 16, 2024. |
| 99.2 | Investor Presentation dated October 22, 2024. |
| 104 | Cover Page Interactive Data File- the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CALUMET, INC. | ||
|---|---|---|
| Date: October 22, 2024 | By: | /s/ Todd Borgmann |
| Name: | Todd Borgmann | |
| Title: | President and Chief Executive Officer |
EX-99.1
Exhibit 99.1
Montana Renewables Receives $1.44 Billion Conditional Commitment from DOE for Renewable Fuels and
Biomass Energy Facility
| • | Montana Renewables to expand Sustainable Aviation Fuel capacity by 300 million gallons per year<br> |
|---|
INDIANAPOLIS — (PR NEWSWIRE) — October 16, 2024 — Calumet, Inc. (NASDAQ: CLMT) (“Calumet,” “we,” “our” or “us”) announced today that the U.S. Department of Energy (“DOE”) Loan Programs Office (“LPO”) has awarded a conditional commitment for a loan guarantee of up to $1.44 billion to fund the construction and expansion of a renewable fuels facility owned by Montana Renewables, LLC (“Montana Renewables” or “MRL”). Montana Renewables is an unrestricted subsidiary of Calumet.
The expansion would position Montana Renewables as one of the largest Sustainable Aviation Fuel (“SAF”) producers globally with production capacity of approximately 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel (“RD”).
“We would like to thank the DOE LPO team for its dedication and partnership during this process,” said Bruce Fleming, CEO of Montana Renewables. “Furthermore, our commitment to expanding SAF supply benefits the local community, the State of Montana, and the Pacific Northwest economic region. We are grateful for the steadfast support received from Great Falls, Cascade County, the State of Montana and Congressional officials and authorities.”
MRL expects to execute a sequence of discrete individual projects including: a second renewable fuels reactor (allowing approximately half of the 300 million gallon SAF capability to be online by 2026); debottlenecking of the existing renewable fuels and feedstock pretreatment units; installation of SAF blending and logistics assets; increased renewable hydrogen production; addition of cogeneration for renewable electricity and steam; on-site water treatment and recycling capabilities; and other site enhancements.
“Our MaxSAF^TM^ planned expansion is fully aligned with strategic national interest in low-emission sustainable alternatives,” Fleming continued. “The expansion will directly replace fossil jet and diesel; reduce MRL’s carbon footprint by producing more renewable hydrogen and electricity; and contribute to regional economic development.”
Regional Development
An economic impact study^1^ 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, at its peak, 450 construction jobs and up to 40 operations jobs. ****
Conditional Commitment Framework
The Conditional Commitment contemplates a loan guarantee structured in two tranches. The first tranche of approximately $778 million is expected to close in the fourth quarter of this year, and the balance of the loan guarantee is to be disbursed through a delayed draw construction facility from the beginning of construction in 2025 through the anticipated completion of the MaxSAF^TM^ project in 2028.
| ^1^ | https://www.bber.umt.edu/pubs/Econ/Calumet-Impact-Report.pdf |
|---|
If finalized, the loan will have a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus 3/8% when issued (currently approximately 4 3/8%). Servicing of principal and interest will be deferred until MaxSAF^TM^ is commissioned.
A $150 million equity investment will be made at the initial closing. Retained earnings from MRL will supplement DOE funds to maintain a 55/45 debt to equity ratio during the MaxSAF^TM^ construction sequence.
While this conditional commitment represents a significant milestone and demonstrates DOE’s intent to finance the project, certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee.
“Through our collaboration with the U.S. Department of Energy, we are thrilled to continue forward on the leading edge of our nation’s Sustainable Aviation Fuel transition,” said Calumet’s CEO Todd Borgmann. “This investment will allow us to leverage our first-mover advantage and unique renewable hydrogen and pretreatment technologies to transform Montana Renewables into a world scale SAF producer. Through this conditional commitment, the U.S. is leading the world in renewable aviation, the hardest to abate sector in transportation, while demonstrating our country’s innovation and technical leadership. Innovation is at the heart of what we do at Calumet and we are honored that Montana Renewables can help solidify our nation’s position as a global leader in the one of energy’s fastest growing niches.”
About SAF
Sustainable Aviation Fuel (SAF) is a combination of synthetic paraffinic kerosene (SPK) and conventional jet fuel meeting ASTM D7566 and ASTM D1655 specifications. Designed to reduce the aviation industry’s carbon footprint, SAF is drop-in compatible with existing aviation fueling infrastructure and aircraft engine technology. SAF volumes in this press release refer to 100% renewable SPK.
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 loan facility (the “DOE Facility”) that MRL expects to receive from the DOE LPO, including the timing, size and intended use of borrowings under such facility, (ii) our expectation that the DOE Facility will enable MRL to complete the MaxSAF^TM^ construction and that such project will be completed on time and on budget, (iii) whether and when the DOE Facility will be funded, including whether and when certain conditions such as negotiation of definitive financing documents will be satisfied, (iv) our expectation regarding our business outlook and cash flows, including with respect to the Montana Renewables
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business, and (v) 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; 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.
Investors:
John Kompa 317-957-5237
Public Relations:
Media Oakes 317-957-5319
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EX-99.2
Montana Renewables Awarded DOE Conditional Loan Commitment October 22, 2024 Exhibit 99.2
Forward looking statements / safe harbor This presentation has been prepared by Montana Renewables, LLC (“MRL”, “we”, “our” or like terms) as of October 22, 2024.This presentation has been prepared for information purposes and convenient reference only and is not intended to be complete. The information contained herein is subject to change, completion, or amendment from time to time without notice. Some of the statements contained herein, including information incorporated by reference, discuss future expectations, or state other forward-looking information. 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. The statements and information herein that are not purely historical data are forward-looking statements, including, but not limited to, the statements regarding (i) our expectations regarding the proposed loan facility (the “Proposed DOE Facility”) that MRL expects to receive from the U.S. Department of Energy (“DOE”) Loan Programs Office (“LPO”), including the timing, size and intended use of borrowings under such facility, (ii) our expectation that the Proposed DOE Facility will enable MRL to complete the MaxSAFTM construction and that such project will be completed on time and on budget, (iii) whether and when the Proposed DOE Facility will be funded, including whether and when certain conditions such as negotiation of definitive financing documents will be satisfied, (iv) our expectation regarding our business outlook and cash flows, including with respect to the MRL business, and (v) 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 and should not be regarded as a representation by us that any of our expectations or beliefs will be achieved. 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 Sustainable Aviation Fuel and renewable diesel; 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; our ability to access the debt and equity markets; the occurrence of any event, change or other circumstance that could give rise to the termination of DOE’s conditional commitment; 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 of this presentation. 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. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. 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.
Strategic vision MaxSAFTM Montana Renewables, Inc (“MRL”) expects to execute a sequence of discrete individual projects, including: a second renewable fuels reactor (allowing approximately half of the 300 million gallon SAF capability to be online by 2026); debottlenecking of the existing renewable fuels and feedstock pretreatment units; installation of SAF blending and logistics assets; increased renewable hydrogen production; addition of cogeneration for renewable electricity and steam; on-site water treatment and recycling capabilities; and other site enhancements. Our planned expansion is fully aligned with strategic national interest in low-emission sustainable alternatives. The expansion will directly replace fossil jet and diesel; reduce MRL’s carbon footprint by producing more renewable hydrogen and electricity; and contribute to regional economic development. Regional Development An economic impact study 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. 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 other regional development, particularly for renewable feedstocks sourced from farms and ranches. By driving a localized value chain of transportation, agricultural and energy related businesses similar to the Minnesota SAF Hub, MRL will create a large-scale, end-to-end SAF industry including public and private partners in Montana and the Pacific Northwest. The MRL expansion is expected to create approximately 1,000 additional jobs during peak construction while increasing permanent Calumet employment to approximately 415 employees in Great Falls of whom about half are MRL employees. https://www.bber.umt.edu/pubs/Econ/Calumet-Impact-Report.pdf First Mover Already a first mover in the evolving SAF sector, the MaxSAFTM expansion would position Montana Renewables as one of the largest Sustainable Aviation Fuel (“SAF”) producers globally with production capacity of ~300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel (“RD”). DOE LPO support followed a rigorous due diligence process and MRL is pleased to have been selected to drive national goals under the Grand SAF Challenge.
Conditional commitment approved 10/16/24 Up to $1.44 billion conditional commitment DOE to be loan guarantor and senior secured lender Flexibility to add a 3rd party loan ranked pari passu Funds provided by Federal Financing Bank Approved under Title XVII Section 1706 Target deliverables 4Q 2024—1Q 2025: Finalize the Loan Guarantee Agreement Close and receive Tranche 1 funding 4 DOE Selected Metrics Borrower Guarantor Montana Renewables, LLC US Department of Energy Amount Up to $1.44bn in two tranches Tranche 1: Up to $778mm funded at closing (est 4Q 2024) Tranche 2: Up to $662mm delay draw term loan ~2025-28 Use of Proceeds Tranche 1 : Funding MRL eligible expenses incurred to date Tranche 2 : Funding MAX SAFTM construction going forward Security First-priority lien on all collateral Maturity 15 years from the Closing Date Amortization None, during the Availability Period(1) After the end of the Availability Period(1): quarterly payments until the Maturity Date Rate Treasury of same maturity plus 3/8% FFB Spread Currently ~ 4 3/8% (2) During MaxSAF construction(1) : Paid-in-kind Availability Period means the earliest to occur of (a) the date the loan is fully disbursed; (b) a date certain to be agreed; and (c) the date on which final completion of MaxSAFTM construction occurs. Final completion of MaxSAFTM construction is expected to occur 46 months following the Closing Date per DOE term sheet. As of October 16, 2024, the date the DOE conditional commitment was received.
Tranche 1 Uses of Tranche 1 DOE loan guarantee proceeds Funds MRL eligible expenses incurred to date Consolidates collateral for DOE senior secured lender Replaces all existing 3rd party lenders (existing servicing costs decline by $79MM/yr.) Conditions precedent to Tranche 1 closing While this conditional commitment represents a significant milestone and demonstrates DOE’s intent to finance the project, certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee Execute Final Loan Guarantee Agreement Invest $150mm additional equity (expect to source from existing shareholders) Other customary conditions, which are generally already satisfied through just-completed DOE diligence, including satisfactory feedstock supply and offtake contracts and “bring-downs” of DOE advisor reports
Pro forma Capital Structure after tranche 1 Montana Renewables Holdings LLC (Pledgor) Montana Renewables, LLC (DE) (Borrower) Montana Renewables Inc Calumet Montana Refining, LLC WPGG 14 United Aggregator, L.P. ~ 0.1% ~ 14.2% ~ 85.7% 100% Total DOE Financing up to $1.44 billion committed facilities Tranche 1 funding of up to $778mm
MaxSAFtm and tranche 2 funding MaxSAFTM includes a series of discrete, modular projects to enhance MRL capability and reduce emissions A. Increase SAF capacity to ~150mm gallons/year within ~2 years First step is to install the previously-acquired second reactor Early estimate capex of $150-250MM B. Increase SAF capacity to ~300mm gallons/year within ~3 to 4 years Sequential steps: execution of other project modules including Renewable hydrogen production, expansion of existing Renewable Fuels Unit and Feedstock Pretreatment Unit, wastewater treatment, renewable electricity and steam via cogeneration, SAF truck rack capability, other efficiency projects Tranche 2 funding will be drawn during MaxSAFTM construction subject to satisfaction of other customary conditions precedent, and MRL maintaining DOE at 55% debt to total capitalization EstimatedYields, kbcd Runrate1 2024 Second Reactor ~2026 MAX SAF ~2027/8 Renewable Diesel 9 4 2-4 Renewable Jet (100%)2 2 10 15-20 Renewable Naphtha 1 1.5 2-3 1 Demonstrated midyear 2024 2 100% Renewable SPK, ASTM D-7566 (the Into-wing volumes are double the above after blending)
