STAMFORD, Conn., Aug. 2, 2017 /PRNewswire/ -- Tronox Limited
(NYSE:TROX) announced today that it has signed a definitive
agreement to sell its Alkali Chemicals business to Genesis Energy,
L.P. (NYSE:GEL), a diversified midstream energy master limited
partnership headquartered in Houston,
Texas, for $1.325 billion in
cash. The transaction is expected to close in the second half
of 2017, subject to customary regulatory approvals and closing
conditions.
Alkali Chemicals is the world's largest producer of natural soda
ash with its mining and processing facilities located in Green
River, Wyo. Alkali's products are used in glass
manufacturing, detergents, baked goods, animal nutrition
supplements, pharmaceuticals, and other essential products.
Peter Johnston, chief executive
officer of Tronox, said: "We were pleased to have received
significant interest in our Alkali business from multiple potential
buyers. Genesis' proposal was the most compelling for its overall
value, with its combination of price, favorable contract terms,
speed to closing, committed financing, and expected ease of
regulatory approvals. These considerations, in aggregate,
provided the highest level of certainty to Tronox. We
anticipate being able to close this transaction prior to our
planned closing of the Cristal TiO2 acquisition.
"Alkali Chemicals has consistently delivered strong operational
and financial performance. The caliber of the Alkali
workforce and their commitment to safe, high-quality production are
unmatched in the natural soda ash industry. I thank the
leadership team and all Alkali employees for their contributions to
Tronox," said Johnston.
The sale of Alkali Chemicals is the next step in positioning
Tronox as the global leader in TiO2. The proceeds
will be used to fund the majority portion of the cash consideration
for the Cristal TiO2 acquisition, which is expected to
close by the first quarter of 2018. As an integral part of
this strategy, the company announced its intention to refinance a
portion of its capital structure. Net debt leverage of
approximately 4.5x trailing twelve months pro forma EBITDA before
synergies is expected at the closing of the Cristal
transaction.
Credit Suisse is acting as financial advisor to Tronox for both
the Cristal and Alkali transactions and Kirkland & Ellis LLP
and Willkie Farr & Gallagher LLP
are Tronox's legal advisors.
Second Quarter 2017 Selected Preliminary Financial
Results
"We are also very pleased to report strong preliminary results
for the second quarter of 2017 with revenue up 16 percent over
prior year, adjusted EBITDA of $140
million and adjusted EPS of $0.09," said Johnston.
- Revenue of $622 million up 16
percent versus prior year; TiO2 revenue up 26
percent
- GAAP diluted EPS of $0.02;
adjusted EPS of $0.09 (Non-GAAP)
- Income from operations of $55
million; adjusted EBITDA of $140
million up 97 percent versus prior year (Non-GAAP)
- TiO2 income from operations of $61 million up more than seven-fold and adjusted
EBITDA of $123 million up 116 percent
versus prior year; adjusted EBITDA margin of 29 percent
- TiO2 pigment selling prices 7 percent above prior
quarter and 18 percent above prior-year quarter
- Alkali income from operations of $23
million up 92 percent and adjusted EBITDA of $41 million up 41 percent versus prior year
- Loss from sale related to the Alkali transaction is expected to
be approximately $200 million in the
second half of the year
Johnston concluded: "We see the momentum in our TiO2
business continuing across the balance of this year and expect to
benefit from additional pigment selling price increases, favorable
market conditions for titanium feedstock and co-products, and
continued strong cost performance. We are confident that 2017
will be a year of strong performance and that 2018 will be a
transformational one for Tronox. Cristal TiO2
integration planning is proceeding on schedule so that we can from
day one begin to realize the substantial value creation enabled by
our combination."
Tronox plans to report its full second quarter 2017 financial
results on the schedule previously announced with a press release
issued on Tuesday, August 8, 2017,
after the market close and a webcast conference call held on
Wednesday, August 9, 2017, at
8:30 a.m. ET (New York). Call-in details are provided
later in this release.
Tronox has not yet finalized its financial statement close
process for the quarter ended June
30, 2017. As a result, the information in this
statement is preliminary and based upon information available to
the Company as of the date of the statement. In connection
with the finalization process, Tronox may identify items that would
require adjustments to its preliminary financial results announced
herein. The company's financial results could be different, and
those differences could be material. The preliminary financial
results have been prepared by and are the responsibility of Tronox
management. Our auditors, PricewaterhouseCoopers LLP, have not
audited the accompanying preliminary financial data.
Capital Structure Refinancing
Tronox also announced its intent to refinance a portion of its
capital structure with the expectation of lowering its overall cost
of debt while extending the portfolio's weighted average years to
maturity. The company expects to improve its mix of secured
and unsecured debt and achieve more favorable covenants. The
company also expects the new debt will provide additional pay down
flexibility as the combination of Tronox's and Cristal's
TiO2 businesses is expected to generate substantial
additional free cash flow. Net debt leverage of approximately
4.5x trailing twelve months pro forma EBITDA before synergies is
expected at the closing of the Cristal transaction. Further
decreases in net leverage are anticipated during the period
following the Cristal closing.
The Company anticipates completing the refinancing by
mid-October. The proposed refinancing is subject to market
conditions, and there can be no assurances that the proposed
refinancing will be completed.
Second Quarter 2017 Financial Results Release and Webcast
Conference Call
Financial Results Release: Tuesday,
August 8, 2017, after the market close via PR Newswire and
the Tronox Limited website: tronox.com
Webcast Conference Call: Wednesday,
August 9, 2017, at 8:30 a.m.
ET (New York). The
live call is open to the public via Internet broadcast and
telephone.
Internet Broadcast: http://www.tronox.com/
Dial-in telephone numbers:
U.S. / Canada: +1.877.831.3840
International: +1.253.237.1184
Conference ID: 54296385
Conference Call Presentation Slides will be used during the
conference call and are available on our website at
http://www.tronox.com/
Webcast Conference Call Replay: Available via the Internet and
telephone beginning on Wednesday, August 9,
2017 at 10:30 a.m. ET
(New York), until 1:00 p.m. ET (New
York), on Monday, August 14,
2017.
Internet Replay: www.tronox.com
Replay dial-in telephone numbers:
U.S. / Canada: +1.855.859.2056
International: +1.404.537.3406
Conference ID: 54296385
About Tronox
Tronox Limited operates two vertically integrated mining and
inorganic chemical businesses. Tronox TiO2 mines and
processes titanium ore, zircon and other minerals, and manufactures
titanium dioxide pigments that add brightness and durability to
paints, plastics, paper, and other everyday products. Tronox Alkali
mines trona ore and manufactures natural soda ash, sodium
bicarbonate, caustic soda, and other compounds which are used in
the production of glass, detergents, baked goods, animal nutrition
supplements, pharmaceuticals, and other essential products.
For more information, visit www.tronox.com
Additional Information and Where to Find It
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval. In connection with the Transaction
Agreement (the "Cristal Transaction Agreement"), by and between
Tronox Limited (the "Company"), The National Titanium Dioxide
Company ("Cristal") and Cristal Inorganic Chemicals Netherlands
Coöperatief W.A. (the "Cristal Transaction"), the Company has
filed, and intends to file, relevant materials with the U.S.
Securities and Exchange Commission ("SEC"). The Company filed
a preliminary proxy statement with the SEC on June 30, 2017. Investors and Security holders
are urged to read the proxy statement (including all amendments and
supplements thereto) and all other relevant documents regarding the
proposed Cristal Transaction filed with the SEC or sent to
shareholders as they become available as they will contain
important information about the Cristal Transaction. You may
obtain a free copy of the proxy statement and other relevant
documents filed by the Company with the SEC at the SEC's website at
www.sec.gov. Copies of documents filed by the Company with the SEC
will be available free of charge on the Company's website at
www.tronox.com or by contacting the Company's Investor Relations at
+1.203.705.3800.
Certain Information Regarding Participants
The Company, Cristal and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies in respect of the Cristal Transaction. You
can find information about the Company's directors and executive
officers in the Company's definitive annual proxy statement filed
with the SEC on March 16, 2017.
Additional information regarding the interests of such potential
participants is included in the preliminary proxy statement
regarding the Cristal Transaction, and will be included in other
relevant documents filed with the SEC.
Forward Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance based on our growth strategies and
anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements. These and other risk factors are discussed in the
company's filings with the SEC, including those under the heading
entitled "Risk Factors" in our Annual Report on Form 10-K for the
year ended December 31, 2016.
Significant risks and uncertainties may relate to, but are not
limited to, the risk that the Alkali sale transaction does not
close due to a failure of a closing condition or termination of the
Alkali purchase agreement in accordance with its terms causing the
Company to seek alternative financing for the Cristal Transaction,
the risk that the Cristal Transaction will not close, including by
failure to obtain shareholder approval, failure to obtain any
necessary financing or the failure to satisfy other closing
conditions under the Cristal Transaction Agreement or by the
termination of the Cristal Transaction Agreement; failure to plan
and manage the Cristal Transaction effectively and efficiently; the
risk that a regulatory approval that may be required for the
Cristal Transaction is delayed, is not obtained or is obtained
subject to conditions that are not anticipated; the risk that
expected synergies will not be realized or will not be realized
within the expected time period; unanticipated increases in
financing and other costs, including a rise in interest rates;
reduced access to unrestricted cash; compliance with our bank
facility covenants; the price of our shares; general market
conditions; our customers potentially reducing their demand for our
products; more competitive pricing from our competitors or
increased supply from our competitors; operating efficiencies and
other benefits expected from the Cristal Transaction.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. Neither we nor any
other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether as a result of new information or future developments.
Media Contact: Bud Grebey
Direct: +1.203.705.3721
Investor Contact: Brennen
Arndt
Direct: +1.203.705.3722
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SOURCE Tronox Limited