Tronox Inc. (TROX)

[pinkyringcapital]

ethicalinvestor3 - some answers - the epa essentially hadcuffed the entire process with the intent on taking as much of the value for themselves as they could. having said that, this is actually a much better deal for stockholders. we get warrants for 7.6 percent of the company with no dilution vs 5% after dilution, 7yr instead of 2yr, some warrants at an EV of 1.4b instead of all at EV 1.5b

a valuation fight likely would only end up with more money in the hands of the EPA and quite possibly could cause tronox to lose sales and/or customers due to the delay in exiting bk. so i suspect the EC negotiated the best deal they possibly could under the circumstances mgmt put them in.

whatever shares or warrants mgmt gets will clearly be too many in my book. I believe they admitted in court that they weren't skilled in corp reorganizations. I think they totally botched the environmental negotiations.

stock and warrant info
http://www.kccllc.net/documents/0910156/0910156101105000000000023.pdf

The issuance of the New Common Stock by Reorganized Tronox Incorporated, including pursuant to the
Rights Offering, and options, restricted stock or other equity awards reserved for the Management Equity Plan, is
authorized without the need for any further corporate action or without any further action by the Holders of Claims.
On the Effective Date, 6,819,857 shares of New Common Stock shall be issued pursuant to the Rights Offering
Procedures and 7,634,554 shares of New Common Stock shall be issued to the GUC Pool for Distribution as
described in Article III.B.3 above.

Holders of Class 8 Equity Interests in Tronox Incorporated will now receive their pro rata
share of an improved warrant package, consisting of two series of warrants struck at
different valuation levels, which consideration will be distributed regardless of whether
or not the class of equity interests votes in favor of the Plan

New Series A Warrants to acquire, in the aggregate, 544,041 shares of New Common
Stock (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) for an exercise price of $62.13 per share, based on an implied total
enterprise value for Reorganized Tronox of $1.4 billion; and
• New Series B Warrants to acquire, in the aggregate, 672,175 shares of New Common
Stock (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
Warrants) for an exercise price of $68.56 per share, based on an implied total enterprise
value for Reorganized Tronox of $1.5 billion.

NOTE - Values reflected in this summary assume a high end $1.3 billion total enterprise valuation for Reorganized
Tronox, (b) $468 million in funded debt on the effective date of the Plan and (c) 15,000,000 shares outstanding
prior to any warrant exercise, which translates into a price of $55.46 per share at a $1.3 billion total enterprise
valuation