Tronox: court OK's request for $425 million replacement DIP facility

By Lisa Kerner

Charlotte, N.C., Oct. 20 - Tronox Inc.'s request to obtain a $425 million replacement debtor-in-possession facility and repay its current DIP facility was approved by the U.S. Bankruptcy Court for the District of Delaware on Wednesday, according to an attorney familiar with the case.

As previously reported, Tronox received court approval to hire Goldman Sachs Lending Partners LLC to syndicate a replacement DIP and exit financing facility that will refinance its existing $425 million DIP and exit financing facility on improved terms.

The new facility carries an interest rate that is 200 basis points less than the non-default rate under the existing facility.

By repaying the existing facility with the proceeds of the new loan, Tronox will eliminate its current obligation to pay 2% default interest on the existing facility on account of continuing defaults.

Together, the lower interest rate and the elimination of default interest will save Tronox about $1.45 million per month in interest expense.

The court will rule Oct. 26 on Tronox's request for approval to enter into a commitment letter under which it could receive $125 million in exit financing from Wells Fargo Capital Finance, LLC.

Tronox, an Oklahoma City-based producer and marketer of titanium dioxide pigment, filed for bankruptcy on Jan. 12, 2009. Its Chapter 11 case number is 09-10156.

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