UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 17, 2008
TRONOX INCORPORATED
(Exact name of registrant as specified in its charter)
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| DELAWARE
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1-32669
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20-2868245 |
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| (State or other jurisdiction
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(Commission File Number)
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(IRS Employer Identification No.) |
| of incorporation) |
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211 N. Robinson, Suite 300
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Oklahoma City, Oklahoma
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73102 |
(Address of principal executive offices)
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(Zip Code) |
(405) 775-5000
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
The information under “Amendment to Credit Agreement and Guarantee Agreement and Collateral
Agreement” in Item 8.01 is incorporated into this Item 1.01 by reference.
Item 8.01. Other Events.
Amendment to Credit Agreement and Guarantee and Collateral Agreement
On July 17, 2008, Tronox Incorporated (the “Company”) and its subsidiary Tronox Worldwide LLC
(the “Borrower”) entered into the Third Amendment to Credit Agreement and Second Amendment to
Guarantee and Collateral Agreement (collectively, the “Amendment”) with lenders holding a majority
of the aggregate principal amount of loans under the Credit Agreement, dated as of November 28,
2005, among the Company, the Borrower, the lenders from time to time parties thereto, Lehman
Brothers Inc. and Credit Suisse, as joint lead arrangers and joint bookrunners, ABN Amro Bank N.V.,
as syndication agent, JPMorgan Chase Bank, N.A. and Citicorp USA, Inc., as co-documentation agents,
and Lehman Commercial Paper Inc., as administrative agent, as amended by the First Amendment dated
as of March 12, 2007, and as further amended by the Second Amendment to Credit Agreement and First
Amendment to Guarantee and Collateral Agreement dated as of February 8, 2008 (as amended, the
“Credit Agreement”).
Among other things, the requisite lenders agreed to amend Section 7.1(a) of the Credit
Agreement regarding the Company’s Consolidated Total Leverage Ratio (as defined in the Credit
Agreement). As amended, the Credit Agreement provides that the Company shall not permit its
Consolidated Total Leverage Ratio for any period of four fiscal quarters to exceed the ratio set
opposite such fiscal quarter under the column “Current”. The ratios provided for under the Credit
Agreement prior to the Amendment are under the column “Previous”.
Consolidated Total Leverage Ratio
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| Three Months Ended |
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Current |
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Previous |
6/30/2008 |
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5.20x |
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4.90x |
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9/30/2008 |
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5.55x |
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4.90x |
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12/31/2008 |
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5.35x |
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4.90x |
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In addition, as part of the Amendment, the Company agreed, among other things, that from the
date of the Amendment to the date the Company delivers financial statements pursuant to the Credit
Agreement for the year ended December 31, 2008 (the “Amendment Period”), it must use all net
proceeds from asset sales greater than $0.5 million to pay down term loan borrowings rather than
have the ability to reinvest such amounts. In addition, the Company agreed to pledge certain of
its intellectual property and related rights to secure the obligations under the Credit Agreement.
In connection with the Amendment, the Company paid the consenting lenders a fee of 0.75% of
the sum of the aggregate principal amount of the outstanding term loan and the revolving credit
commitment as well as reimbursement of fees, expenses and costs incurred by the administrative
agent.
This description of the Amendment is qualified in its entirety by the copy thereof attached as
Exhibit 99.1 hereto and which is incorporated by reference herein.
There is no assurance that the Company won’t be in default under the Credit Agreement in the
future. If the Company were to be in default under the Credit Agreement, its ability to borrow
under the Credit Agreement would be impaired and the lenders could declare a default which could
ultimately cause all amounts due under the Credit Agreement to become immediately due and payable.
A copy of the Credit Agreement was filed as Exhibit 10.6 of the Company’s current report on
Form 8-K, filed with the Securities and Exchange Commission (“SEC”) on December 7, 2005. A copy of
the first amendment thereto was filed Exhibit 10.19 of the Company’s Annual Report on Form 10-K
filed with the SEC on March 16, 2007. A copy of the Second Amendment was filed as Exhibit 99.1 of
the Company’s current report on Form 8-K, filed with the SEC on February 13, 2008.
Reasons for the Amendment
The Amendment was sought in response to, among other things, the unexpected significant cost
increases the company and industry experienced in the second quarter of 2008 and the continued
impact of the weak U.S. economy. In addition, as Tronox announced previously, its second-quarter
financial results were impacted by production difficulties at its Uerdingen, Germany, and Kwinana,
Western Australia, titanium dioxide facilities, and higher natural gas costs at Kwinana due to the
shutdown of Apache’s Varanus Island natural gas processing facility in Australia.
As previously announced, in response to these ongoing challenges, the Company continues to
implement steps to reduce costs and is continuing its efforts to increase prices. The Company
continues to evaluate all strategic alternatives to improve the business, including development
opportunities, mitigation of legacy liabilities, capital restructuring and land sales.
Item 9.01 Financial Statements and Exhibits.
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| Exhibit No. |
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Description |
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99.1
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Third Amendment to Credit Agreement and Second Amendment to Guarantee and Collateral
Agreement. |