Summary:
*Released selected preliminary unaudited financial results for the quarter ending December 31, 2020:
*Revenue expected to be $783 million(1)
*Adjusted EBITDA expected to be $200 to $204 million(1)(2)
*Termination of the TTI transaction agreement following rejection by the U.K. Competition and Markets Authority (“CMA”) of a remedy proposal and opening of a Phase 2 investigation
*$300 million discretionary debt repayment to be made by the end of the quarter from cash on the balance sheet originally intended for the TTI acquisition
*Total of $500 million in discretionary debt repayments including $200 million repayment made in December 2020
*Increasing annualized dividend to $0.32 per share from $0.28 per share, equivalent to a 14 percent increase, effective when the normal first quarter 2021 dividend is declared
*Well-positioned to continue participation in the recovery and demonstrate the full capabilities of Tronox’s vertically integrated portfolio
Tronox Holdings plc (NYSE:TROX) (“Tronox” or the “Company”), a leading integrated manufacturer of titanium dioxide pigment, today released selected preliminary unaudited financial results for the quarter ending December 31, 2020, and provided an update on its business, including the decision to terminate its agreement with Eramet S.A. (“Eramet”) to acquire the TiZir Titanium and Iron (“TTI”) business following the CMA’s rejection of a remedy proposal and opening of a Phase 2 investigation.
“We are disappointed with the rejection of our remedy proposal and respectfully disagree with the view taken by the CMA,” stated Jean-François Turgeon, co-Chief Executive Officer; Executive Vice President and Chief Operating Officer. “While TTI was an asset that would have furthered our vertical integration strategy, the decision to terminate the agreement reflects the fact that under the CMA’s rules, we could not have obtained regulatory approval prior to the termination date under the agreement with Eramet. We are currently building significant momentum in the market and are already well-positioned to execute on our strategic plans with our existing portfolio today. We will continue to leverage our vertical integration and sourcing strategy to supply our pigment feedstock requirements and remain focused on our efforts to bring the Jazan smelter online.” Upon signing of the agreement to acquire TTI in May 2020, $18 million of funds were placed into escrow which, due to the termination of the agreement, will now be released to Eramet as a break fee.
John D. Romano, co-Chief Executive Officer; Executive Vice President, Chief Commercial and Strategy Officer, commented, “We remain confident that our vertical integration strategy will continue to provide a competitive advantage, allowing Tronox to deliver reliable, safe, quality, low-cost, sustainable tons to our customers while outperforming our TiO2 peers. The TiO2 business continues to benefit from the global industry recovery in 2021. With the current momentum, we are very optimistic about the short-, medium-, and long-term potential for both TiO2 and Tronox as the leading integrated supplier in the industry.’
“Consistent with our previously stated capital allocation priorities, we will be making a $300 million discretionary debt repayment before the end of the quarter from cash on the balance sheet originally intended for the TTI acquisition. Together, with a $200 million repayment made in December 2020, Tronox will have repaid $500 million of indebtedness by the end of the first quarter bringing us closer to our total gross debt target of $2.5 billion.’
“Additionally, the Board intends to increase our annualized dividend to $0.32 per share from $0.28 per share, which equates to a 14 percent increase effective with the regular first quarter 2021 dividend. This reflects the confidence we have in the trajectory of the recovery in the sector and in our differentiated business model and is consistent with our previously stated goal to increase dividends as business conditions permit.”
more detail at: https://www.tronox.com/tronox-releases-selected-preliminary-fourth-quarter-2020-financial-results-and-announces-termination-of-tti-acquisition-agreement/