Tronox enters letter agreements for $425 million in exit loans

By Caroline Salls

Pittsburgh, Nov. 17 - Tronox Inc. has entered into a letter agreement with General Electric Capital Corp. and Goldman Sachs Lending Partners LLC to act as financing sources and arrangers on a $125 million asset-based revolving credit exit facility and a $300 million first-lien exit term loan, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Tronox said the exit financing would be used if it chooses to move forward with a stand-alone plan of reorganization rather than a sale.

The exit financing proceeds would be used to refinance the company's existing debt, to fund a potential settlement with the U.S. government and be available for general corporate purposes following Tronox's emergence from bankruptcy.

As previously reported, the company is following a dual-track process to maximize value for its estates and stakeholders.

As part of this process, Tronox said it is actively seeking a sale of all or substantially all of its operating assets, and it previously entered into a stalking horse agreement with affiliates of Huntsman Corp.

The auction is expected to be held in early December.

Tronox, an Oklahoma City-based producer and marketer of titanium dioxide pigment, filed for bankruptcy on Jan. 12, 2009 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 09-10156.

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