Renewable Energy Group Announces Proposed Offering of $125 Million of Convertible Senior Notes

Renewable Energy Group, Inc. (REG) (NASDAQ:REGI) announced today that it intends to offer, subject to market conditions and other factors, $125 million aggregate principal amount of convertible senior notes due 2036 (the “Notes”) in a private placement to qualified institutional buyers pursuant to an exemption from the registration requirements of the Securities Act of 1933. In connection with the offering, REG expects to grant the initial purchasers of the Notes an option to purchase up to an additional $18.75 million aggregate principal amount of Notes on the same terms and conditions.

REG intends to use approximately $50 million of the net proceeds from the offering to repurchase a portion of REG’s outstanding 2.75% convertible senior notes due 2019 (the “2019 Notes”) through negotiated transactions, open market transactions or otherwise. Any repurchase of the 2019 Notes could have the effect of raising or maintaining the market price of REG’s common stock above levels that would otherwise have prevailed, or preventing or retarding a decline in the market price of REG’s common stock. In particular, REG expects that certain of the sellers of 2019 Notes that REG repurchases may purchase shares of common stock in the market in connection with those sales of 2019 Notes, including during the course of the day on which REG prices the offering. Those common stock purchases could represent a significant portion of the trading in REG’s common stock on that day. In addition, REG expects to use approximately $30 million of the net proceeds from the offering to repurchase shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate as REG’s agent. REG expects to repurchase those shares from purchasers of the Notes in the offering at a purchase price per share equal to the closing price per share of REG’s common stock on the date of the pricing of the offering. These repurchases could have the effect of raising or maintaining the market price of REG’s common stock above levels that would otherwise have prevailed, or preventing or retarding a decline in the market price of REG’s common stock concurrently with the pricing of the Notes, and could result in a higher effective conversion price for the Notes. If the initial purchasers exercise their option to purchase additional Notes, REG may use the net proceeds from that exercise to purchase additional 2019 Notes or shares of its common stock or both. REG intends to use the remainder of the net proceeds from the offering for working capital and other general corporate purposes, which may include additional repurchases of the 2019 Notes and shares of REG’s common stock and financing potential strategic transactions.