Calumet announces major corporate transition

Calumet Specialty Products Partners, L.P., a leader in the manufacturing and marketing of specialty and renewable fuels, has announced a significant corporate restructuring. The company is transitioning from a limited partnership to a newly formed Delaware corporation, named New Calumet.

Headquartered in Indianapolis, Indiana, U.S.A., Calumet operates 12 facilities across North America. The company specialises in the production and marketing of a diverse range of specialty branded products and renewable fuels.

In the United States, a C-corporation, often simply referred to as a “C-corp,” is a legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity. 

This strategic move, unanimously approved by the Board of Directors of Calumet’s general partner, follows a comprehensive agreement involving Calumet GP, LLC, The Heritage Group, and other owners of the general partner. The restructuring aims to streamline operations and expand the investor base, reflecting confidence in Calumet’s growth trajectory.

Amy Schumacher, CEO of The Heritage Group and majority owner of the general partner, expressed enthusiasm about this new phase. “This transition marks a pivotal moment in Calumet’s journey, setting the stage for further growth and value realisation,” Schumacher said.

Todd Borgmann, CEO of Calumet, echoed this sentiment, highlighting the constructive discussions leading to this beneficial agreement for all stakeholders. “This restructuring is a testament to our vision and the unwavering support of our partners, particularly in the context of our Montana Renewables initiative,” Borgmann said.

Key elements of this corporate transition include:

• Conversion of each common unit of Calumet into one share of New Calumet’s common stock.
• Transformation of all incentive distribution rights and the 2.0% General Partner interest into 5.5 million shares of common stock and 2.0 million warrants.
• Establishment of a nine-member board of directors for New Calumet, with nomination rights for The Heritage Group based on their stock ownership.

The completion of this transition is contingent upon customary conditions, including approval from Calumet’s unitholders and satisfaction of closing conditions outlined in the associated agreements. The merger is designed to be tax-free for unitholders, barring certain recapture scenarios due to the change from a partnership to a C-Corporation. The transition is expected to conclude within nine months.

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