It's a long, long road:


Administrative Law Judge Upholds FTC’s Complaint Allegations that Merger of Major Titanium Dioxide Companies would have Harmed Competition

For Release
December 17, 2018

Tags:

Manufacturing Industrial Goods Bureau of Competition Competition Merger Horizontal

In an Initial Decision announced today, Chief Administrative Law Judge D. Michael Chappell upheld allegations in a Federal Trade Commission complaint challenging the merger of Tronox Limited and Cristal, two top suppliers of chloride process titanium dioxide (“TiO2”), a white pigment used in a wide variety of products, including paint, industrial coatings, plastic, and paper.

“The evidence proves that the planned Acquisition may substantially lessen competition in the relevant market for the sale of chloride TiO2 in North America in violation of Section 7 of the Clayton Act and Section 5 of the FTC Act,” Judge Chappell wrote in the decision. He concluded that the planned Acquisition would create a highly concentrated market and increase the likelihood of coordinated conduct among the remaining firms.

“Respondents have failed to rebut this proof, including by failing to demonstrate that entry or expansion would be timely, likely, and sufficient to counteract the likely anticompetitive effects of the Acquisition, or to demonstrate cognizable synergies or efficiencies that might justify the likely anticompetitive effects of the Acquisition,” Judge Chappell wrote.

An order Judge Chappell included with the Dec. 7, 2018 Initial Decision would require the respondents to terminate the Proposed Acquisition Agreement and cease taking any direct or indirect actions to consummate it; to return all confidential information to each other; and to certify final compliance within 15 days of the order becoming final.

According to the FTC’s Administrative Complaint, Tronox Limited’s proposed acquisition of competitor Cristal, for $1.67 billion and a 24 percent stake in the combined entity, would violate the antitrust laws by significantly reducing competition in the North American market (comprised of the United States and Canada) for chloride process titanium dioxide. The FTC alleged that the acquisition, if consummated, would increase the risk of coordinated action among the remaining competitors, and increase the risk of future anticompetitive output reductions by Tronox.

The Appeals Process. Because the Federal Trade Commission has sought preliminary relief to prevent consummation of the proposed acquisition in federal court, Commission Rule 3.52(a) provides that the Judge’s Initial Decision is subject to automatic review by the full Commission. On September 12, 2018, the United States District Court for the District of Columbia issued a Memorandum Opinion and Order granting the Commission’s Motion For Preliminary Injunction.

The full decision of the judge is on:
https://www.ftc.gov/system/files/documents/cases/docket_9377_tronox_et_al_initial_decision_redacted_public_version.pdf

I hope the FTC will accept Tronox's proposal for the divestiture of the ashtabula plant as a possible solution.

Tronox-Cristal merger likely to be finalized in Q1: Tasnee CEO

Source: https://www.argaam.com/en/article/articledetail/id/582807:
"27-11-2018

"The planned merger between Tronox and Cristal is expected to be complete by early 2019, Mutlaq Al-Morished, chief executive of National Industrialization Co. (Tasnee), told Al Arabiya channel.



The deal is underway and progressing as negotiations with the US Federal Trade Commission (FTC) is advancing, he said.



FTC filed in July a complaint against Tronox’s plan to acquire the titanium dioxide (TiO2) business of National Titanium Dioxide Ltd. (Cristal), a subsidiary of Tasnee.



All regulatory approvals were approved and the deal is pending FTC approval.



FTC had requested to sell Cristal’s plant as a condition to approve the deal, while Tasnee was able to convince the federal authority that there’s no need to sell a whole plant, and apart [sic] is enough, he said."

[Bolds are mine. EH22]

I believe you are right, but we'll need a lot of patience. By the way, there was an interesting favorable write-up on Tronox in Value Investors Club on May 18, 2018. It is worth reading it:

https://www.valueinvestorsclub.com/idea/TRONOX_LTD/142232

EH22

On September 14, 2018, at 1 P.M., the Chief Administrative Law Judge will hear the closing arguments of Tronox and the FTC. See:
https://www.ftc.gov/system/files/documents/cases/d09377_alj_order_setting_closing_arguments_public592139.pdf

EH22

KT Investor,


It took about a week to receive the shares.


Sincerely,

EH22

Dear fuller 11,

The warrants expire at 5:00 P.M., New York City Time, on February 14, 2018.


In my opinion, if you still own warrants, you should not attach particular importance to the quoted price, as it is manipulated because of the low volume, and I believe it would be presently hard to sell them for their true worth.

You can either exercise them for shares:
paying $38.71 for each TROXW (Warrant A) for 6.02 shares,
paying $44.01 for each TROXG (Warrant B) for 6.03 shares.

You can also exercise them in a cashless manner, i.e., then you pay nothing and receive less shares according to a formula that depends on the share price. You can combine cashless for part of the warrants and pay the exercise price for the rest.

If you do nothing then the warrants are deemed worthless after expiry date.

This is just my two cents and not an advice.

I myself chose the cashless option, but it depends on your judgment. The best way to do the above is through your broker (be it a bank or some other broker as per your case).
Please read the document that I referred to in my reply to Bembel.

Sincerely,

EH22

Bembel,

As far as I know you have to either sell the warrants or exercise them by the expiry date. After that they are deemed worthless.

Please read the entire AMENDED AND RESTATED WARRANT AGREEMENT at:

https://www.sec.gov/Archives/edgar/data/1530804/000119312512277246/d369573dex106.htm

I hope this helps.

Sincerely,

EH22

Thank you for your reply.

EH22

Philipmax,

Can you elaborate?

Thanks,

EH22

Linda,

I believe, although I am not sure, that their claim for 27M is only for damages, in addition to the claim for their part of 85% of the LTW, etc. See the following quote:

"55. Under those contracts, Plaintiffs have a vested interest in their share of 85% of the recovery in the Anchor Savings Litigation. Plaintiffs are entitled to the specific performance of
these contracts. Additionally, and in the alternative, by failing to pay Plaintiffs this share, and in contesting those vested rights, Defendant is in breach of those contracts. As a result of that breach, Plaintiffs have been damaged in an amount to be proven at trial, but at least $27,000,000."

EH22

EI,

Thank you for your response.

Sincerely, EH22

EI,

I will appreciate your take on the current situation. Do you think "new" common holders, i.e., not class action or "old" equity holders, still have a chance for some value here?

Thank you for your opinion.

Sincerely, EH22

RE # 7620

I am not sure that my numbers are correct. At first the court assigned 70% to the preferred and 30% to the common, but you are apparently right that later it was changed to 75% and 25% respectively. Thus it is not entirely clear how many opted in. What is clear, however, that the vast majority opted in and your conclusion is right.

Thank you for the clarification.

EH22

RE #7611

I believe (see #5997) that the 8.77% referred to is: "8.77% of the Reorganized Common Stock (as such term is defined in the Seventh Amended Plan), distributed to holders of Common Equity Interests. That's 8.77% of 30%"

If this is correct and if indeed there were 200M new shares, then 200M X 0.3 X 0.0877 = 5.262 M. This makes the 4.486672M shares distributed 85.26% of supposed full distribution, hence 85.26% presumably opted in, whereas 14.74% did not.

I am not sure this is correct.

EH22

Yes. And presently I plan to keep them for several more years.

Fuller,

The Warrants Conversion was updated.

I suggest you read and file to yourself the following document:

http://files.shareholder.com/downloads/TRX/2167346686x0x579701/88E0CF09-A679-4D2F-9924-7A46A2C20C7F/Tronox_Warrants.pdf

I believe it answers your question.

All the best.

EH22

Tibby,


I do not know more beyond what I have written. You might be interested in the following links to the story (one of them has the email of the author):

http://www.bloomberg.com/news/2011-05-11/anadarko-kerr-mcgee-can-dismiss-some-tronox-claims-judge-says.html
[Reporter: Tiffany Kary in New York at tkary@bloomberg.net]

http://www.bloomberg.com/news/2012-01-24/rochelle-on-tronox-kerr-mcgee-anadarko-wamu-donzi-audio.html

I hope this helps.

EH22

Developments, some positive (IMHO):

1. Bloomberg Law published an article on Jan. 24, 2012:
Rochelle on Tronox-Kerr-McGee-Anadarko
Jan 24, 2012 4:56 PM GMT+0200

Kerr-McGee Corp. and Anadarko Petroleum Corp. may find themselves under more pressure to settle now that the bankruptcy judge refused to impose a ceiling on damages that Tronox Inc. might win at trial to begin in May. One method proposed by Tronox would produce damages of $15.5 billion, as Bloomberg Law's Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their bankruptcy podcast.
{He adds that the result could be damages between several hundred million to $15.5 billion}
(Source: Bloomberg) I do not have presently the exact link.



2. In the S-4/A - registration statement, submitted on Feb 7, 2012, the following valuation of the merger transaction is given:
Potential Total Value to Tronox Incorporated Stockholders.
The financial advisors calculated illustrative total value to be received by the Tronox Incorporated stockholders in the Transaction by using the range of illustrative value indications of $213 to $285 per Class A Share of Tronox Limited determined using discounted cash flow analysis as described above and adding the cash portion of the Transaction Merger Consideration of $12.50 per share. This calculation resulted in a range of illustrative value indications of $225 to $298 for the Transaction Merger Consideration, which represents a premium of 37.9% to 42.1% over the range of illustrative stand-alone discounted cash flow value indications of $163 to $209 per share of Tronox Incorporated common stock determined using discounted cash flow analysis as described above.

3. February 9, 2012:
Tronox to Host February 21st Earnings Conference Call to Discuss Fourth Quarter and Year-End 2011 Financial and Operational Results

OKLAHOMA CITY, Feb. 9, 2012 /PRNewswire/ -- Tronox Incorporated (TROX.PK) (Tronox) announced today that it will release its fourth quarter and full year 2011 earnings on Monday, February 20th, 2012, at 6 p.m. EST followed by a Tuesday, February 21st, 2012, conference call at 9 a.m. EST to discuss its financial and operating results.

4. Baupost, headed by Seth A Klarman, reports as of February 10, 2012, that it has an aggregate of 1,376,500 Tronox shares = 9.19% of shares and 6.12% of his PF. http://www.sec.gov/Archives/edgar/data/1061768/000106176812000022/trox13gorig.htm

EH22

It is not entirely clear to me. However I compiled the following paragraphs concerning warrants and "merger" from the Tronox Warrant Agreement filed January 13, 2011 (it has some corrections at the end) I give them below, and hope it helps:

Section 6.3 Dividends and Other Distributions.

(a) If at any time prior to the exercise in full of the Warrants, the Company shall fix a record date for the issuance or making of a distribution to all holders of the Common Stock (including any such distribution to be made in connection with a consolidation or merger in which the Company is to be the continuing corporation and any such distribution taking the form of a pro rata repurchase of shares of Common Stock) of evidences of its indebtedness, any other securities or any cash, property or other assets (excluding a combination, reclassification or recapitalization referred to in Section 6.2, and excluding any dividends payable solely in cash) or of subscription rights, options or warrants to purchase or acquire any capital stock of the Company (excluding stock dividends and stock reclassifications referred to in Section 6.2) (any such event being herein called a “Non-Cash Dividend”), the Exercise Price shall be decreased immediately after the record date for such Non-Cash Dividend to a price determined by multiplying the Exercise Price then in effect by a fraction, the numerator of which shall be the then Current Market Price of the Common Stock on the Ex-Dividend Date for such Non-Cash Dividend less the fair market value (as determined in good faith by the Company’s Board of Directors based on the written advice of an independent financial advisory firm of national reputation, without regard to any illiquidity or minority discounts) of the evidences of indebtedness, securities, property or other assets issued or distributed in such Non-Cash Dividend applicable to one share of Common Stock or of such subscription rights or warrants applicable to one share of Common Stock, and the denominator of which shall be such then Current Market Price per share of Common Stock on the Ex-Dividend Date for such Non-Cash
Dividend.


Section 6.5 Reclassification or Reorganization Event. In the case of any reclassification or reorganization of the outstanding shares of Common Stock or other Warrant Shares (other than a change covered by Section 6.2 or that solely affects the par value of such shares of Common Stock), each Holder shall thereafter have the right to exercise its Warrants and in lieu of the Warrant Shares that would otherwise be issuable upon such exercise, receive the kind and amount of shares of stock or other securities or property (including cash) that such Holder would have received pursuant to such reclassification or reorganization if such Holder had exercised such Warrants immediately prior to such event. The immediately preceding sentence shall similarly apply to successive reclassifications and reorganizations. If a Reorganization Event shall occur, the certificate or articles of incorporation of the continuing or surviving or acquiring or resulting entity, or any contract or agreement providing for such
Reorganization Event, shall provide that, so long as any Warrant remains outstanding, each Warrant, upon the exercise thereof at any time after the consummation of such Reorganization Event, shall be exercisable into (at an initial Exercise Price equal to the Exercise Price in effect immediately prior to such Reorganization Event, but subject to any adjustment pursuant to the terms hereof), in lieu of the Warrant Shares issuable upon such exercise prior to such consummation, the amount of cash, securities or other property receivable pursuant to such Reorganization Event by a holder of the number of shares of Warrant Shares for which a Warrant is exercisable immediately prior to the effective time of such Reorganization Event. The
provisions set forth herein providing for adjustments and otherwise for the protection of the holders of Warrants shall thereafter continue to be applicable on an as nearly equivalent basis as may be practicable and any such continuing, surviving, acquiring or resulting entity shall expressly assume all of the obligations of the Company set forth herein to the extent applicable.
It is acknowledged and agreed that if, in connection with any Reorganization Event, the Warrants become exercisable solely for cash, and the Exercise Price is higher than the amount of cash for which such Warrant is exercisable, then, upon consummation of such reorganization, all Warrants then outstanding with such higher Exercise Price shall automatically be terminated and
cancelled without payment, and the Company may unilaterally terminate this Warrant Agreement by giving written notice thereof to the Warrant Agent. For purposes hereof, a “Reorganization Event” shall mean (i) a consolidation, merger, amalgamation, share exchange, sale of all or substantially all assets or similar transaction of the Company with or into another
Person pursuant to which the Common Stock is changed into, converted into or exchanged for cash, securities or other property (whether of the Company or another Person) other than in circumstances covered by Section 6.2; (ii) a reorganization, recapitalization or reclassification or similar transaction in which the Common Stock is exchanged for securities other than Common Stock (other than in circumstances covered by Section 6.2); or (iii) a statutory exchange of the outstanding shares of Common Stock for securities of another Person. The provisions of this Section 6.5 shall apply similarly to all successive reclassifications, reorganizations and events constituting Reorganization Events.

Corrections:
Section 6.3 Dividends and Other Distributions.

(a) If at any time prior to the exercise in full of the Warrants, theshall fix a record date for the issuance or making of a distribution to all holders of the Common Stock (including any such distribution to be made in connection with a consolidation or merger in which the Company is to be the continuing corporation and any such distribution taking the form of a pro rata repurchase of shares of Common Stock) of evidences of its indebtedness, any other securities or any cash, property or other assets (excluding a combination, reclassification or recapitalization referred to in Section 6.2, and excluding any dividends payable solely in cash) or of subscription rights, options or warrants to purchase or acquire any capital stock of the Company (excluding stock dividends and stock reclassifications referred to in Section 6.2) (any such event being herein called a “Non-Cash Dividend”), the Exercise Price shall be decreased immediately after the record date for such Non-Cash Dividend to a price determined by multiplying the
Exercise Price then in effect by a fraction, the numerator of which shall be the then Current Market Price of the Common Stock on the Ex-Dividend Date for such Non-Cash Dividend less the fair market value (as determined in good faith by the Company’s Board
of Directors based on the written advice of an independent financial advisory firm of national reputation, without regard to any illiquidity or minority discounts) of the evidences of indebtedness, securities, property or other assets issued or distributed in such Non-Cash Dividend applicable to one share of Common Stock or of such subscription rights or warrants applicable to one share of Common Stock, and the denominator of
which shall be such then Current Market Price per share of Common Stock on the Ex-Dividend Date for such Non-Cash Dividend.


If a Reorganization Event shall occur, the certificate or articles of incorporation of the continuing or surviving or acquiring or resulting entity, or any contract or agreement providing for such Reorganization Event, shall provide that, so long as any Warrant remains outstanding, each Warrant, upon the exercise thereof at any time after the consummation of such Reorganization Event, shall be exercisable into (at an initial Exercise Price equal to the Exercise Price in effect immediately prior to such Reorganization Event, but subject to any adjustment pursuant to the terms hereof), in lieu of the Warrant Shares issuable upon such exercise prior to such consummation, the
amount of cash, securities or other property receivable pursuant to such Reorganization Event by a holder of the number of shares of Warrant Shares for which a Warrant is exercisable immediately prior to the effective time of such Reorganization Event. The provisions set forth herein providing for adjustments and otherwise for the protection of the holders of Warrants shall thereafter continue to be applicable on an as nearly equivalent basis as may be practicable and any such continuing, surviving, acquiring or resulting entity shall expressly assume all of the obligations of the Company set forth herein to the extent applicable. It is acknowledged and agreed that if, in connection with any Reorganization Event, the Warrants become exercisable solely for cash, and the Exercise Price is higher than the amount of cash for which such Warrant is exercisable, then, upon consummation of such reorganization, all Warrants then outstanding with such higher Exercise Price shall automatically be terminated and cancelled without payment, and the Company may
unilaterally terminate this Warrant Agreement by giving written notice thereof to the Warrant Agent. For purposes hereof, a “Reorganization Event” shall mean (i) a consolidation, merger, amalgamation, share exchange, sale of all or substantially all assets or similar transaction of the Company with or into another Person pursuant to which the Common Stock is changed into, converted into or exchanged for cash, securities or other property (whether of the Company or another Person) other than in circumstances covered by Section 6.2; (ii) a reorganization, recapitalization or reclassification or similar transaction in which the Common Stock is exchanged for securities other than Common Stock (other than in circumstances covered by Section 6.2); or (iii) a statutory exchange of the outstanding shares of Common Stock for securities of another Person. The provisions of this Section 6.5 shall apply similarly to all successive reclassifications, reorganizations and events constituting Reorganization Events.

Tronox Acquires Exxaro's Mineral Sands Operations

See details at
http://www.tronox.com/NEWS_TRONOX_ACQUIRES_EXXAROS_MINERAL_SANDS_OPERATIONS.htm

also

Sep 26 2011 - Tronox Conference Call/Webcast Information 09/26/2011 9a.m. EDT

Seems like a positive to me.

EH22

Sept. 2011 Price Increase

Tronox Announces TiO2 Price Increases

Oklahoma City, August 22, 2011 – Tronox Incorporated, on behalf of its subsidiary companies, today announced the following price increases for all TRONOX® titanium dioxide (TiO2) grades:

Effective October 1, 2011 or as contracts allow:
• Latin America, minimum $500 per tonne
• Europe/Middle East/Africa 500 Euros per tonne or $700 per tonne in U.S. Dollar markets.
• Asia Pacific $500 per tonne

In addition, effective September 1, 2011 or as contracts allow:
• North America $0.10 per pound on select laminate, specialty and plastic grades

These increases are in addition to those previously announced. Other increases may be announced locally within each region.

Headquartered in Oklahoma City, Tronox is one of the five largest producers and marketers of titanium dioxide pigment. Titanium dioxide pigment is an inorganic white pigment used in paint, coatings, plastics, paper and many other everyday products. The company’s pigment plants, which are located in the United States, Australia and the Netherlands, supply high-performance products to approximately 1,000 customers in 90 countries. In addition, Tronox produces electrolytic products, including sodium chlorate, electrolytic manganese dioxide, boron trichloride, elemental boron and lithium manganese oxide. For information on Tronox, visit www.tronox.com.

###



Source:
http://www.tronox.com/News_092011_Price_Increase.htm


EH22

Tronox to Host August 18 Earnings Conference Call to Discuss Second Quarter 2011 Financial and Operational Results.
http://finance.yahoo.com/news/Tronox-to-Host-August-18-prnews-1783496845.html?x=0&.v=1

EH22

VIC Writeup.

There is an interesting write-up on TROX at the valueinvestorsclub.com on April 6, 2011. I do not want to cite it in full, but I will give the main points on which the writer relies upon (at the time of the write-up TROX traded at $140.00):

"The thesis is

1) Titanium dioxide pricing is very firm and is headed higher. Could/should eventually go to where new build makes sense (i.e. from ~$2,500 / metric ton in 2010 towards $5,000 / ton perhaps in the next 2 years or so), which falls to the bottom line and would more than double EBITDA.

2) Company still trades cheap on a relative basis (trades at 6.75x 2011 EBITDA, while Kronos is at 7.5x 2011 EBITDA and Rockwood at 8.25x EBITDA). ~7x isn't unreasonable given they're going to be generating specialty chemical, 25%+ EBITDA margins with solid pricing power for the next 4+ years.

3) Very favorable supply/demand dynamics, pure play

4) Potential M&A: Kronos seems eager, and Huntsman has bid for Tronox before.

5) Standard post-reorg catalyst (improving liquidity, cleaned up balance sheet and environmental liabilities which had been a large overhang before, upcoming research coverage, increased investor familiarity, etc.)

This could go to $225 (more conservatively in the medium term) or $310 in a few years."

EH22

An Interesting Research Report about post emergence Tronox:

http://www.crtllc.com/publications/Tronox-Overview-02-14-11.pdf

A paragraph from page 2 of the document:

"The reorganized equity of Tronox (TROXV) is trading at 7.1x our 2011E EBITDA of $350 million. We believe it is trading at a discount to its closest competitor Kronos (KRO), which trades at 8.2x 2011E consensus EBITDA. Applying a similar valuation
multiple to TROXV would yield a price per share of $153 per share versus its current trading price of $123, an upside of 24%.
Attractive free cash flow characteristics --- We estimate 11% free cash flow yield to the equity in 2011. ... "

EH22

uhlmant,

Best of luck to you as well and I did not mean to offend you in any way.

Good luck.

EH22

uhlmant,


February 20, 2011

Please note the report of #6304, who had already received the registration of his warrants, which in my opinion disproves your assumptions. The language in the company's announcement is somewhat unclear, but from the report in #6304 and earlier reports you can learn that each stock holder (either TRXAQ or TRXBQ) gets both warrants A and B. So everything seems to be fine.

Thanks.

EH22

I advise to trust only published data. This is my last post for today, and I would like to cite the company web site http://www.tronox.com/reorganization/rorg_emerge/rorg_emerge_faq.htm

"FAQs

Frequently Asked Questions Regarding Tronox’s Restructuring

The information contained herein is as of February 14, 2011.

Has Tronox emerged from Bankruptcy?

Yes, on February 14, 2011, Tronox Incorporated (“Tronox”) emerged from its Chapter 11 Proceedings. Tronox is now reorganized around its existing operating businesses, including its facilities at Oklahoma City, Oklahoma; Hamilton, Mississippi; Henderson, Nevada; Botlek, The Netherlands and its Western Australian joint venture.

What is the current capitalization of Tronox?

Equity

* 15,000,000 shares of Common Stock Outstanding
* Series A Warrants to purchase 544,041 shares of Common Stock at $62.13 per share
(exercisable for 7 years)
* Series B Warrants to purchase 672,175 shares of Common Stock at $68.56 per share
(exercisable for 7 years)"

Thank you.

EH22

Link?

EH22

Curious12: Effective Date

From court docket 2827 (http://www.kccllc.net/documents/0910156/0910156110215000000000010.pdf) - Notice of (A) Occurrence of Effective Date of Plan of Reorganization, (II) Assumption and Rejection of Executory Contracts and Unexpired Leases and (III) Deadlines for Filing Certain Claims:

"2. Effective Date. On February 14, 2011, pursuant to the satisfaction of the conditions set forth in Article IX of the Plan and in applicable provisions of the Confirmation Order, the Effective Date of the Plan occurred, and the Plan was consummated."

I hope it clarifies some issues.

EH22

RE: #6211

BEMBEL,

It is my contention that your math is flawed. There are, as far as I know:
Outstanding Sh.
TRXAQ 18,556,127
TRXBQ 22,889,931
Total 41,446,058

As I noted before they plan to issue 1,216,216 warrants so we should receive give or take 1 warrant for each 34 shares (divide total shares by warrants number) we own (either A or B).

Now, the valuation of warrants is quite complicated. As I am not a professional I can only tell you what I have learned from my web wanderings. There are models to calculate this value and they are dependent on the strike price, volatility, time to expiration, interest rate, dividend, etc.

I consulted the site http://www.hkex.com.hk/eng/prod/secprod/dwrc/dwrc_cal/part4_1.html which offers a free calculation.

I entered the following data:
Stock price ($) 113.0
Strike price ($) 65.0 (For simplicity purposes I took a rough average of 62.13 and 68.56, but you can compute each one separately and ascribe the relative value and the results come about the same)
Volatility (%) per year 30.0 (tentatively; if it is higher the warrant value goes up and vice versa)
Interest rate (%) per year 4.0 (tentatively; if it is higher the warrant value goes up and vice versa)
Expiry 7 years.
Dividend 0.

With these terms:
The binomial model gives the warrant a value of $ 68.17;
The Black Scholes model values it at $ 68.14.
You can tweak the numbers differently, but I believe the warrant value should be—if indeed the stock price is $113—at a pessimistic scenario around $58 and with optimistic values $83.

If we take the base case I described then a value of $68 divided by 34 gives our stock presently a value of about $2.00.



I hope this helps.

JMHO
EH22

RE: #6206

curious12,

Please note published data and not opinions are the ones you ought to count on.

I cite from http://biz.yahoo.com/e/101123/trxaq.pk8-k.html the relevant paragraph of the Form 8-K for TRONOX INC 23-Nov-2010
Bankruptcy or Receivership, Financial Statements and Exhibits:

"Warrant Agreement
The New Series A Warrants will consist of warrants to acquire, in the aggregate, 544,041 shares of New Common Stock, subject to adjustment as set forth in the Warrant Agreement (which represents 3.5% of the New Common Stock issued and outstanding on the Effective Date, together with all New Common Stock issuable upon exercise of the New Series A Warrants), with an expiration date of the seventh anniversary of the Effective Date, and an exercise price of $62.13 per share, based on an implied total enterprise value for Reorganized Tronox of $1.4 billion. The New Series A Warrants and the shares of New Common Stock issued upon exercise thereof will be subject to dilution by any shares of New Common Stock issued after the Effective Date, including upon exercise of the New Series B Warrants and shares issued under the Management Equity Plan.

The New Series B Warrants will consist of warrants to acquire, in the aggregate, 672,175 shares of New Common Stock, subject to adjustment as set forth in the Warrant Agreement (which represents 4.1% of the New Common Stock issued and outstanding on the Effective Date, together with all New Common Stock issuable upon exercise of the New Series A Warrants and the New Series B Warrants), with an expiration date of the seventh anniversary of the Effective Date, and an exercise price of $68.56 per share, based on an implied total enterprise value for Reorganized Tronox of $1.5 billion. The New Series B Warrants and the shares of New Common Stock issued upon exercise thereof will be subject to dilution by any shares of New Common Stock issued after the Effective Date, including shares issued under the Management Equity Plan."

So it appears there will be exactly 1,216,216 warrants altogether. As far as I understand it (but please read the document yourself) the effective date appears to be day of emergence, so anyone who presently owns stocks is entitled to warrants, no matter when he purchased the stocks.

I hope it helps,

JMHO.

EH22

The Sale was Adjourned to December 13.

See document at http://www.reliefcanyon.com/uploads/Adjournment_of_Bankruptcy_Sale.pdf