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Exxaro to sell off bulk of Tronox stake

February 24/2021

MOSCOW (MRC) -- Exxaro Resources (Pretoria, South Africa), a diversified resources firm, will sell off the bulk of its stake in Tronox in a public offering announced, Chemweek.

The 17-million share secondary public offering will reduce Exxaros stake in Tronox to about 1.6% from about 14.6%. Exxaro began selling down its stake in Tronox, which had previously exceeded 40%, in 2017. The company took a stake in Tronox in 2012, in compensation for Tronoxs acquisition of Exxaros mineral sands operations. A 2019 deal also saw Tronox acquire Exxaros interest in its South African subsidiaries, which hold mining licenses for a variety of titanium dioxide raw materials.

Tronox is also issuing to Exxaro about 7.2 million ordinary shares in the entire company in exchange for Exxaros 26% interest in Tronoxs South African subsidiaries, which hold mining licenses for a variety of titanium dioxide raw materials. Those shares are being included as part of the public offering.

The offering effectively completes a series of transactions between Tronox and Exxaro that were agreed to in 2018, covering Exxaros stakes in Tronox and in the companys South African subsidiaries. In 2018, Exxaro "agreed to structure any potential divestiture of [the stake] in a controlled and scheduled manner." The transactions enabled Tronox to carry forward net losses for tax purposes, and to re-domicile in the United Kingdom from Australia.

J.P. Morgan is acting as the stock offerings joint bookrunning manager, and lead underwriter. BofA Securities, Deutsche Bank Securities and Morgan Stanley are also acting as joint bookrunning managers. The underwriters have an option to purchase an additional 2.55 million shares within 30 days.

Tronox will have about 150.8 million shares outstanding after the offering is complete, and the company will receive no proceeds from the offering. Shares in Tronox closed at USD20.12 on 23 February, but declined in after-hours trading.

As MRC informed before, in late March, 2020, Tronox Holdings provided an investor update in light of the current global pandemic, to emphasize the strength of the company's cash flow, balance sheet, and sources of liquidity. The first quarter was expected to close better than anticipated, due to positive market trends and developments thus far in 2020. The company anticipated adjusted EBITDA in the first quarter to reach USD160170 million, adjusted earnings per share of USD0.100.18, and revenue of USD700730 million.

We remind that Russia's output of chemical products rose in November 2020 by 9.5% year on year. At the same time, production of basic chemicals increased in the first eleven months of 2020 by 6.6% year on year. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the January-November 2020 output. November production of benzene grew to 120,000 tonnes from 106,000 tonnes a month earlier due to higher capacity utilisation of several producers. Overall output of this product reached 1,236,600 tonnes over the stated period, down by 2.2% year on year.
Author:Anna Larionova
Tags:dioksid titana, chemical fertilizers, petroleum products, ethylene, neftegaz, petrochemistry, Tronox.
Category:General News
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