OKLAHOMA CITY, Nov. 3, 2010 /PRNewswire-FirstCall/ -- Tronox Incorporated (Pink Sheets: TRXAQ, TRXBQ), on behalf of itself and its affiliated debtors and debtors in possession (collectively, "Tronox"), announced today that it has reached a settlement with the official committee of equity security holders (the "Equity Committee") that secures support by the Equity Committee for Tronox's First Amended Joint Plan of Reorganization (as amended from time to time, the "Plan") and eliminates the Equity Committee's planned objections to confirmation of the Plan. The settlement was reached following mediation among the parties, with the Honorable Robert D. Drain, United States Bankruptcy Judge, Southern District of New York, serving as mediator. In addition to Tronox and the Equity Committee, the United States of America, the official committee of unsecured creditors and the ad hoc committee of holders of Tronox's prepetition unsecured notes participated in the mediation and support the settlement that was reached as a result thereof.
Under the current Plan, shareholders of Tronox Incorporated would have received two-year warrants convertible into 5% of the common equity in reorganized Tronox at a strike price indicative of a $1.5 billion enterprise value for reorganized Tronox, but only if the class of shareholders of Tronox Incorporated voted to accept the Plan. As a result of the settlement, existing shareholders of Tronox Incorporated will receive an improved package of warrants, consisting of two tranches of warrants, each exercisable for seven years, on the following terms:
- Tranche A warrants convertible into 3.5% of the common equity in reorganized Tronox Incorporated issued on the Effective Date, at a strike price based on a $1.4 billion total enterprise value for reorganized Tronox; and
- Tranche B warrants convertible into 4.0% of the common equity in reorganized Tronox Incorporated issued on the Effective Date, at a strike price based on a $1.5 billion total enterprise value for reorganized Tronox.
The Tranche A and Tranche B warrants will convert into the respective percentages of ownership of the new common stock issued on the Effective Date of the Plan on a fully diluted basis, subject only to dilution by an equity incentive plan that continues to be negotiated. While Tronox recommends that shareholders vote to accept the Plan, Tronox shareholders will receive their pro rata share of the warrants regardless of whether they vote to accept or reject the Plan.
"On behalf of Tronox and its major stakeholders, we are extremely appreciative of Judge Drain's efforts, professionalism and stamina in helping the parties reach this settlement, which should pave the way for Tronox to emerge from chapter 11 on a expeditious basis," said Michael J. Foster, Vice President, General Counsel & Secretary of Tronox Incorporated.
Tronox will promptly file with the Bankruptcy Court a modified version of the Plan incorporating the terms of the settlement. The deadline to vote on the Plan and to file objections to the Plan remains November 5, 2010 at 5:00 p.m. (PT). The deadline for holders of Class 3 General Unsecured Claims and Class 6 Indirect Environmental Claims to exercise rights and participate in the Rights Offering remains November 10, 2010 at 5:00 p.m. (PT). The hearing to consider confirmation of the Plan is scheduled to commence on November 17, 2010 at 11:00 a.m. (ET) before the Honorable Allan L. Gropper, United States Bankruptcy Judge, Southern District of New York.
Tronox commenced its chapter 11 cases on January 12, 2009. Tronox is among the world's leading producers of titanium dioxide pigment and other specialty chemicals used in the manufacture of products such as paints, plastics, paper and batteries. For more information, please visit http://www.tronox.com or http://www.kccllc.net/tronox.
Important Note: the transactions described above remain subject to approval by the Bankruptcy Court. There can be no assurance that any of the transactions mentioned above will be approved by the Bankruptcy Court or will be consummated. The Plan and the transactions discussed above are subject to closing conditions.
Forward-Looking Statements: Some information in this news release regarding Tronox's or management's intentions, beliefs or expectations, or that otherwise speak to future events, including the terms of the Plan, are "forward-looking statements" within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include those statements preceded by, followed by or that otherwise include the words "believes," "will," "expects," "anticipates," "intends," "estimates," "projects," "target," "budget," "goal," "plans," "objective," "outlook," "should," or similar words. Future results and developments discussed in these statements may be affected by numerous factors and risks, such as the accuracy of the assumptions that underlie the statements, the approval of the Plan by the Bankruptcy Court and requisite stakeholders, the satisfaction of closing conditions, the market value of Tronox's products, demand for consumer products for which Tronox's businesses supply raw materials, the market for debt and/or equity financing, changes in laws and regulations, the ability to respond to challenges in international markets, changes in currency exchange rates, political or economic conditions in areas where Tronox operates, trade and regulatory matters, general economic conditions, and other factors and risks identified in the Risk Factors Section of Tronox's Annual Report on Form 10-K for the year ended December 31, 2007, and subsequent Quarterly Reports on Form 10-Q, as filed with the U.S. Securities and Exchange Commission (the "SEC"), and other SEC filings. Actual results and developments may differ materially from those expressed or implied in this news release. Tronox does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. Investors are urged to consider closely the disclosures and risk factors in Tronox's Annual Report on Form 10-K for the year ended December 31, 2007, available on Tronox's website, http://www.tronox.com. This report also can be obtained from the SEC by calling 1-800-SEC-0330 and is otherwise available at http://www.sec.gov.
CONTACT: Robert Gibney of Tronox Incorporated, +1-405-775-5105, Cell, +1-405-323-7219, firstname.lastname@example.org
SOURCE Tronox Incorporated