Calumet secures DOE loan funding for subsidiary

Calumet, Inc., a petroleum refining company with a market capitalization of $1.36 billion, announced today that the U.S. Department of Energy (DOE) has completed its review and will proceed with the loan funding for Montana Renewables, LLC, a subsidiary of Calumet.

The first tranche of approximately $782 million is expected to be disbursed next week. According to InvestingPro data, this funding comes at a crucial time as the company operates with a significant debt burden of $2.18 billion.

This development follows a delay due to a tactical review by the DOE to ensure the loan’s alignment with the new administration’s energy strategy. The resumed funding process marks a positive step for Calumet’s subsidiary, which had been awaiting the loan to advance its operations.

InvestingPro analysis reveals that the company’s current ratio of 0.63 indicates its short-term obligations exceed liquid assets, making this funding particularly significant. Subscribers can access 8 additional key ProTips about Calumet’s financial position.

The loan from the DOE is a significant financial move for Montana Renewables and is expected to support the subsidiary’s growth and development in alignment with current energy policies. The company has expressed its expectations regarding the funding of the DOE loan facility, which is seen as a critical financial resource.

For a comprehensive analysis of Calumet’s financial position and outlook, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.

Calumet’s disclosure is based on information furnished in a Form 8-K filed with the SEC today. The company has cautioned that the information should not be considered as filed for purposes of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing under the Securities Act of 1933, except as explicitly stated.

The announcement provides investors and stakeholders with updated information on the status of the DOE loan and its expected impact on Calumet’s subsidiary. The company’s Executive Vice President and Chief Financial Officer, David Lunin, has signed off on the report, affirming its contents.

This news is based on a press release statement and reflects the latest developments in Calumet’s financial strategy and government relations.

In other recent news, Calumet Specialty Products (NASDAQ:CLMT) Partners was downgraded to "Sell" by UBS analysts, citing potential impacts on the company’s earnings and growth prospects, including a projected $100 million annual hit to EBITDA in 2025 due to tax credit shifts.

Alongside this, uncertainties surrounding a Department of Energy loan and increasing competition in the industry were also mentioned as potential challenges.

In financial developments, Calumet issued $100 million in senior notes due 2028 with a 9.75% interest rate, intending to use the net proceeds to redeem part of its outstanding 11.00% Senior Notes due 2026. Until the funds are utilized for the intended redemption, the company may invest the proceeds in short-term, interest-bearing instruments or other investment-grade securities.

The company also reported a preliminary fourth-quarter net loss that could reach $54 million, partially offset by insurance proceeds. Calumet anticipates a Q4 Adjusted EBITDA between $45 million and $60 million.

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