Bankruptcy Court approves Tronox's alternate plan to Huntsman proposal

30-Dec-09
Leading producer and marketer of titanium dioxide pigment- Tronox Incorporated has cancelled the auction in connection with its proposed sale of assets to Huntsman Corp. and, received an interim order from the U.S. Bankruptcy Court authorizing Tronox to replace its existing senior secured financing and an order to enter into certain agreements as part of what Tronox describes as a restructuring transaction. The new alternative transaction is sponsored by an ad hoc group of Tronox's unsecured bondholders. Tronox also delivered to Huntsman a notice of termination of the "stalking horse" agreement with Huntsman and its affiliates, under which Huntsman had agreed to purchase selected assets and equity interests of Tronox and certain of its subsidiaries. Huntsman had increased its original bid to a value it believes to be in excess of that to be obtained under the ad hoc bondholders' alternative transaction, and was present to participate at Monday's auction had it not been cancelled by Tronox. Peter Huntsman, President and CEO of Huntsman Corporation, stated, "We continue to believe that our improved bid provided the constituents of Tronox's estate with superior value and protected the interests of Tronox's employees, creditors and other stakeholders. However, Tronox has chosen to go in a different direction, despite the risks and ramifications of the ad hoc bondholders' alternative transaction. While we are disappointed in the result, it became clear that to prevail over the ad hoc bondholders, we would have to overpay for these assets. Ultimately, we chose to exercise the discipline not to do so." He added, "While we continue to believe that the combination of these two businesses held great promise, with our strong balance sheet fully intact, we will seek other opportunities to create lasting value for our shareholders."
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