Huntsman has signed a “stalking horse” asset and equity purchase agreement pursuant to which its wholly-owned subsidiary Huntsman Pigments has agreed to acquire the following assets of Tronox and its subsidiaries under Section 363 of Chapter 11 of the US Bankruptcy Code.
Huntsman’s bid provides for a purchase price of approximately $415m, including working capital. Huntsman intends to finance approximately fifty percent of the purchase price with debt. The agreement will be submitted for approval to the United States Bankruptcy Court for the Southern District of New York.
Peter Huntsman, president and CEO of Huntsman, said: “We look forward to the prospect of acquiring these assets. This acquisition, even before expected synergies, would be immediately accretive to our operating earnings and cash flow, as well as reduce our debt leverage. By combining our existing Pigments division with these assets, we also can realize substantial efficiencies that will benefit the customers, vendors, employees and other stakeholders of the combined business.
“We look forward to completing the auction process and to working productively with the various stakeholders of Tronox to bring this transaction to a timely and orderly conclusion.”
Tronox’s JV partner in Australia, Exxaro Resources, has agreed to waive contractual restrictions on the transfer of Tronox’s JV interests to Huntsman, including applicable right of first refusal and change of control rights, in the event Huntsman is approved by the bankruptcy court as the buyer of the assets.
Tronox and certain of the company’s subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on January 12, 2009.