Tronox Inc. (TROX)

[BEMBEL]

Hello Tibby
As I understand due to the latest data from Tronox Investor relations “NOTICE OF ADJUSTMENT EVENT
CUSIP Nos.:897051116 and 897051124“ from January [9], 2013 the exercise prices have been adjusted:
An adjustment to the Exercise Price (as defined in the Warrant Agreement) in accordance with Section 6.3 of the Warrant Agreement was made as a result of the Dividend.
Accordingly, pursuant to the adjustment prescribed by Section 6.3 of the Warrant Agreement, as of the close of business on November 23, 2012
(a) the exercise price of Series A Warrants and Series B Warrants became $61.29and $67.64, respectively, or (b) pursuant to the Notice of Adjustment Event issued by the Company on August 30, 2012, at the option of Warrant Holders the Exercise Price of the Warrants can be reduced by $12.50 such that the Exercise Price for Series A Warrants shall be $48.79 and the Exercise Price for the Series B Warrants shall be $55.14 and, upon exercise, each Warrant shall be exerciseable for
five Class A Shares and no cash.
http://files.shareholder.com/downloads/TRX/2351766007x0x579701/88E0CF09-A679-4D2F-9924-7A46A2C20C7F/Tronox_Warrants.pdf

For each 1000 warrants class A or rather class B you have to invest $ 48,790 and $ 55,140, means
$ 103,930 and you will get 10,000 new shares (with a today value of approx. $ 21) worth $ 210,000.
Your profit according to the document above should be $ 106,070.

That math includes not the current dividend of $ 1.00 with date of Mar. 4, 2013. Tronox has to make an new adjustment where the new exercise prices should be reduced to $ 47,79 and $ 54,14 , respectively.

By reverse math the current warrant prices are with $ 62 (class A) and $ 64 (class B) above the exercise profit.
$ 62.00 –(5 x $ 21.00 - $ 55.14) = $ 62.00 - $ 49.86 = $ 12.14 for TROXW
$ 64.00 –(5 x $ 21.00 – $ 48.79) = $ 64.00 - $ 56.21 = $ 7.79 for TROXG

Hope, this helps.
BEMBEL