Tronox forbearance agreement, DIP loan maturity extension approved

By Caroline Salls

Pittsburgh, Sept. 23 - Tronox Inc. received court approval to enter into a forbearance agreement and amendment to its replacement debtor-in-possession facility that will allow the DIP loan's maturity to be extended to Dec. 24, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Tronox said its replacement DIP facility provides a flexible maturity date that allows for two three-month extensions.

The company previously exercised the first extension option. If the second extension was not granted, the facility would have matured on Sept. 23.

However, Tronox said it could not further extend the maturity because of events of default on the replacement DIP loan stemming from the termination of its plan support agreement, which expired on June 30, and its failure to proceed with its original plan of reorganization.

The company said the forbearance agreement will allow the DIP facility to be extended. In addition, the agent and lenders have agreed to forgo acting on their default-related rights until Oct. 29.

The forbearance agreement also amends specified milestones related to Tronox's restructuring "that will harmonize the deadlines contained in the replacement DIP agreement with those in Tronox's recently approved equity commitment agreement."

The company will be required to pay a 0.5% extension fee.

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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