Replies to post #2835 on Tronox Inc. (TROX)

[pinkyringcapital]

another article

German TiO2 plant up for sale
08 April 2010

Buyer sought for former Tronox plant seized by administrators during bankruptcy

One of Tronox LLC's former titanium dioxide (TiO2) pigment plants has been put up for sale by the administrator who seized control of the asset when the US producer went into Chapter 11
bankruptcy last year.
The 107,000 tpa sulphate plant, which now operated by Tronox Pigments GmbH and part of an entirely separate company to its former parent, is located in Uerdingen, Germany. The plant was
struggling for profitability for some time prior to the economic downturn.
“We are in the comfortable position of not having to take the first best offer,” said administrator Eberhard Stock said.
The plant was one of the first assets seeking to be sold when owned by Tronox. In 2007 the company released a statement saying that was seeking to "monetise" its only sulphate plant in
order to focus on chloride TiO2 production – a completely different process to produce the white pigment used predominately in paint and coatings.
There is a widely-held industry view that the pigment industry is slowly shifting from sulphate to chloride processing which utilises higher grade feedstocks. Tronox believed this at the time and is set to continue its focus on its chloride plants as it crawls out of administration.
Tronox’s remaining five plants are all chloride production and are seen as holding some of the most advanced in the world together with leading producer DuPont. It is important to note however that its Savannah, Georgia plant in the USA is operating at severely reduced levels at present.
Tronox was on the verge of being taken over by Huntsman Corp. at the end of 2009 but is now in control of its own destiny following a management buyout in the eleventh hour of the deal which would have made the world's second largest producer (IM February 2010: Tronox pulls out of giant TiO2 deal).

[Madclown]

I am not sure that the "seized" part is quite as bad as it sounds. I believe that operating as a Debtor in Posession within the German bankruptcy system is not as common as it is in the U.S. My understanding of the way it works in Germany is more like when a Trustee is appointed in a U.S. case to administer the bankruptcy proceedings in the stead of current management. As a debtor in posession one has more administrative control over the company while operating inside a bankruptcy proceeding. In any event, the return to full operating capacity should bode well for a sale or in the event that the German sub reorganizes as a standalone company.