Tronox Holdings plc 8-K, filed Jan 19, 2021
Tronox Holdings plc (TROX)
8-K
2021-01-19
For: 2021-01-18
View Original
Added on
April 07, 2026
About this 8-K
Tronox Holdings plc filed this 8-K on January 19, 2021, reporting on events of January 18, 2021.
Items reported
- Item 1.02: Ended a material agreement
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 19, 2021 (January 18, 2021 )
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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Laporte Road, Stallingborough
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Grimsby, North East Lincolnshire, DN40 2PR, UK
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(Address of Principal Executive Offices) (Zip Code)
(203 ) 705-3800
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which
registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.02 |
Termination of a Material Definitive Agreement.
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On May 14, 2020, Tronox Holdings plc, a public limited company incorporated under the laws of England and Wales (the “Company”), Tronox Titanium Holdings AS, a Norwegian
corporation and a wholly-owned indirect subsidiary of the Company (“Purchaser”), Eramet S.A., a société anonyme incorporated in France (“Eramet”), and Tizir
Limited, a private limited company incorporated under the laws of England and Wales (“Seller”), entered into a binding stock purchase agreement (the “Purchase Agreement”), pursuant to which the Purchaser agreed to purchase 100% of the issued share
capital of TiZir Titanium & Iron AS, a Norwegian corporation and a wholly-owned subsidiary of the
Seller (the “Business”), for a purchase price of $300.4 million in cash plus interest at 3% per annum from December 31, 2019 until the date of completion (the “Transaction”). One of the conditions to the Transaction was the clearance of certain
regulatory approvals, that would include the UK Competition and Markets Authority (“CMA”) by no later than a date specified in the Purchase
Agreement (the “Condition Satisfaction Date”).
As previously announced, on January 4, 2021, the Company received a decision from the CMA indicating
that it intended to open a Phase 2 investigation into the Company’s proposed acquisition of the Business. In response to the concerns presented by the CMA, the Company submitted a remedy proposal, which the CMA rejected on January 18, 2021. As a
result, the Company has concluded that it is not possible to complete the Transaction by the Condition Satisfaction Date and has elected to terminate the Transaction. Pursuant
to the Purchase Agreement, in May 2020, the Company placed $18 million into escrow, which will now be released to the Seller as a “break fee”.
| Item 2.02 |
Results of Operations and Financial Condition.
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Attached as Exhibit 99.1 is a copy of a press release of the Company, dated January 18, 2021, reporting the Company’s preliminary unaudited financial results for the
quarter ended December 31, 2020.
The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act
of 1933, as amended (the “Securities Act”), or the Exchange Act, except as otherwise stated in that filing. The Company does not undertake any obligation to update the information contained in this Item 2.02, including Exhibit 99.1.
| Item 9.01. |
Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit
No.
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Description
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Press Release, dated January 18, 2021.
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104
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Inline XBRL for the cover page of this Current Report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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TRONOX HOLDINGS PLC
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Date: January 19th, 2021
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By:
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/s/ Jeffrey N. Neuman
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Name: Jeffrey N. Neuman
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Title: Senior Vice President, General Counsel and Secretary
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Exhibit 99.1
Tronox Releases Selected Preliminary Fourth Quarter 2020 Financial
Results and Announces Termination of TTI Acquisition Agreement
Revenue Above Expectations; Adjusted EBITDA to Exceed Previously Issued Guidance
$300 million Discretionary Debt Repayment to be Made by End of Quarter
Increasing Annualized Dividend to $0.32 per share
Summary:
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Released selected preliminary unaudited financial results for the quarter ending December 31, 2020:
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Revenue expected to be $783 million(1)
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Adjusted EBITDA expected to be $200 to $204 million(1)(2)
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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
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$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
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Total of $500 million in discretionary debt repayments including $200 million repayment made in December 2020
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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
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Well-positioned to continue participation in the recovery and demonstrate the full capabilities of Tronox’s vertically integrated portfolio
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Note: The information is preliminary, based upon information available as of today and is subject to change and finalization following the completion of
management’s disclosure controls process.
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Refer to the tables at the end of this press release for a reconciliation to net income. Investors are cautioned that net income is not finalized and is subject
to change, primarily due to the finalization of the income tax provision which would not impact Adjusted EBITDA. For this reason, earnings per share and adjusted earnings per share are not available at this time.
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STAMFORD, Conn., January 18, 2021 – 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.”
Mr. Turgeon added, “Due to the positive dynamics in the market, we delivered an even stronger fourth quarter than we previously contemplated, with sales exceeding
expectations and Adjusted EBITDA coming in above our previously issued guidance. We expect fourth quarter 2020 revenue of $783 million and Adjusted EBITDA of $200 to $204 million, our strongest Adjusted EBITDA performance since we closed the
Cristal acquisition. This performance was driven by a continued demand recovery in the fourth quarter as well as delivery on our synergy targets from the Cristal transaction. Fourth quarter TiO2 volumes increased 8 percent sequentially
and year over year while pricing remained level. Zircon volumes were the strongest of the year, increasing 70 percent sequentially and 48 percent year over year. We will report our full financial results as planned in mid-February.” The selected
preliminary unaudited financial results for the quarter ending December 31, 2020 are preliminary, based upon information available as of today and are subject to change and finalization based on completion of all year-end close processes.
Mr. Romano concluded, “We remain very confident in our ability to deliver industry leading results and are well-positioned to continue our participation in the recovery
and demonstrate the full capabilities of our vertically integrated portfolio.”
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Tronox Holdings plc is one of the world's leading producers of high-quality titanium products, including
titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals; and zircon. We mine titanium-bearing mineral sands and operate upgrading facilities that produce high-grade titanium feedstock materials,
pig iron and other minerals. With nearly 7,000 employees across six continents, our rich diversity, unmatched vertical integration model, and unparalleled operational and technical expertise across the value chain, position Tronox as the preeminent titanium dioxide producer in the world. For more information about how our products add brightness and durability to paints, plastics, paper and other everyday
products, visit Tronox.com.
Forward Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These
forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance including fourth quarter 2020 results, the effects of the COVID-19
pandemic and anticipated synergies based on our growth and other strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important
factors that could cause our actual results, level of activity, performance, actual synergies, or achievements to differ materially from the results, level of activity, performance, anticipated synergies or achievements expressed or implied by the
forward-looking statements. Significant risks and uncertainties may relate to, but are not limited to business and market disruptions related to the COVID-19 pandemic, market conditions and price volatility for titanium dioxide, zircon and other
feedstock materials, as well as global and regional economic downturns, including as a result of the COVID-19 pandemic, that adversely affect the demand for our end-use products; disruptions in production at our mining and manufacturing facilities;
and other financial, economic, competitive, environmental, political, legal and regulatory factors. These and other risk factors are discussed in the Company's filings with the Securities and Exchange Commission (SEC). Expected fourth quarter 2020
results are subject to change and finalization based on completion of all year-end close processes.
Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our
management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, synergies or achievements. Neither we nor any
other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we
undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.
Non-GAAP Financial Measures
Some of the information included in this release is derived from the Company’s consolidated financial information but is not presented in Company’s financial statements
prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered “non-GAAP financial measures” under SEC rules. These non-GAAP financial measures supplement our GAAP
disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management’s rationale for the use of the non-GAAP financial measures can be found in the
schedules to this release.
Media Contact: Melissa Zona
+1.636.751.4057
Investor Contact: Jennifer Guenther
+1.646.960.6598
TRONOX HOLDINGS PLC
RECONCILIATION OF PRELIMINARY NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
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Three Months Ended
December 31, 2020 |
Year Ended
December 31, 2020 |
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Low End
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High End
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Low End
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High End
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Preliminary net income from continuing operations (U.S. GAAP)
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$
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57
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$
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61
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$
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995
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$
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999
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Interest expense
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49
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49
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189
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189
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Interest income
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(2
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(2
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(8
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(8
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Income tax provision (benefit)
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(4
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(4
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(880
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(880
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Depreciation, depletion and amortization expense
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84
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84
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303
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303
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EBITDA (non-U.S. GAAP)
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184
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188
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599
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603
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Share-based compensation (a)
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12
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12
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31
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31
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Transaction costs (b)
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5
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5
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14
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14
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Restructuring (c)
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-
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-
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3
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3
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Integration costs (d)
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-
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-
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10
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10
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Loss on extinguishment of debt (e)
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2
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2
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2
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2
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Foreign currency remeasurement (f)
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4
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4
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(6
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)
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(6
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)
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Pension curtailment gain - net (g)
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(2
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)
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(2
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)
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(2
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)
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(2
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)
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Other items (h)
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(5
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(5
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12
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12
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Adjusted EBITDA (non-U.S. GAAP)
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$
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200
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$
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204
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$
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663
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$
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667
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(a) Represents non-cash share-based compensation.
(b) Represents transaction costs associated with the TTI Transaction, which were recorded in “Selling, general and administrative expenses” in the
unaudited Condensed Consolidated Statements of Operations.
(c) Represents amounts for employee-related costs, including severance.
(d) Represents integration costs associated with the Cristal acquisition after the acquisition which were recorded in “Selling, general and
administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(e) Represents the loss in connection with the voluntary prepayment of our Term Loan Facility.
(f) Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany
receivables and liabilities denominated in a currency other than the functional currency of the entity holding them, which are included in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.
(g) Represents a curtailment gain due to the freezing of plan benefits partially offset by pension settlements.
(h) Includes noncash pension and postretirement costs, asset write-offs, accretion expense and other items included in “Selling general and
administrative expenses”, “Cost of goods sold” and “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.