Indianapolis-based Calumet, Inc. (NASDAQ:CLMT) announced today the successful completion of its strategic conversion from a limited partnership to a corporation, a move that involved multiple agreements and leadership changes, according to a recent SEC filing.
On Monday, Calumet entered into a definitive agreement that culminated in the conversion of Calumet Specialty Products (NASDAQ:CLMT) Partners, L.P. into a wholly owned subsidiary of Calumet, Inc. This transaction resulted in the issuance of approximately 80.4 million shares of common stock to former holders of common units and an additional 5.5 million shares plus 2 million warrants to The Heritage Group, a sponsor party in the deal.
Concurrent with the conversion, Calumet also established new governance structures. This included the appointment of nine directors to its Board, including James S. Carter, Daniel J. Sajkowski, Amy M. Schumacher, Daniel L. Sheets, Paul C. Raymond III, Jennifer G. Straumins, John G. Boss, Karen A. Twitchell, and Todd Borgmann, with Stephen P. Mawer serving as the Chairperson.
The company also entered into a Registration Rights Agreement with the Sponsor Parties, obligating it to file a shelf registration statement within 30 days. The Sponsor Parties are granted rights to participate in underwritten offerings and are provided with "piggyback" registration rights.
Moreover, Calumet signed a Stockholders' Agreement with The Heritage Group, ensuring the election of directors designated by The Heritage Group in accordance with the company's amended and restated certificate of incorporation.
In terms of financial agreements, Calumet entered into Indemnification Agreements with its directors and officers to provide liability protection as permitted under Delaware law. The company executed a Warrant Agreement with Computershare Inc., issuing 2 million warrants to The Heritage Group, each warrant conferring the right to purchase one share of common stock at $20.00 per share.
Calumet's common stock is expected to commence trading under the ticker symbol "CLMT" on The Nasdaq Global Select Market on Thursday, reflecting the same symbol used by the common units prior to the conversion. The company's capital stock description has been updated and filed with the SEC.
This strategic reorganization is part of Calumet's broader efforts to streamline its corporate structure and enhance shareholder value. The information for this article is based on a press release statement.
In other recent news, Calumet Specialty Products Partners has successfully completed a significant corporate restructuring, including the termination of a material definitive agreement, an acquisition, and asset disposition. The restructuring also saw the merger of Merger Sub II into Calumet, making it a wholly owned subsidiary of New Calumet.
Moreover, Calumet's unitholders have overwhelmingly approved a conversion of the company from a master limited partnership to a C-Corporation, a strategic shift expected to attract a broader base of investors.
In terms of financial performance, Calumet reported a robust Q1 EBITDA of $21.6 million and has made strides in reducing debt by repaying $50 million of its 2025 notes. Calumet's Montana Renewables and MAX SAF projects are showing promising progress, with the company clarifying that its Sustainable Aviation Fuel is produced from tallow, not canola oil.
Despite acknowledging industry challenges, Calumet remains optimistic about future investor engagement and a positive EBITDA contribution from Montana Renewables. These are among the recent developments that highlight Calumet's strategic focus on enhancing shareholder value.
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