China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
Tronox gets court OK to tap $100 mln DIP funds
NEW YORK, Jan 13 (Reuters) - Chemical company Tronox Inc TROXA.PK on Tuesday received bankruptcy court approval to tap $100 million in interim debtor-in-possession financing to help pay for continuing operations, less than the $125 million it had asked for originally.
The funding "gets us through, with a cushion," Jonathan Henes, an attorney with Kirkland & Ellis LLP, which is representing Tronox, said after the hearing.
Companies rely on DIP financing to fund operations, including payroll and paying suppliers, while restructuring under bankruptcy protection.
Tronox, an Oklahoma City-based maker of titanium dioxide pigment used in paint, plastics and paper, had a commitment for up to $125 million of DIP financing from its existing lending group, led by Credit Suisse Securities (CSGN.VX).
Judge Allan Gropper said during the hearing at the U.S. Bankruptcy Court in Manhattan that $100 million was probably adequate to pay for corporate obligations and said the company could ask for approval for $25 million more at a hearing on Feb. 6.
Additionally, Gropper denied the company's motion asking the court to approve prepetition claims for payments from some "critical" vendors and service providers.
"I'm not going to give you a slush fund (without) a lot more evidence to show that this is truly critical," Gropper said.
He said Tronox could come before him with specific requests as long as it proved those payments were necessary immediately.
BANKRUPTCY
Tronox's U.S. operations filed for Chapter 11 bankruptcy protection on Jan. 12 to contend with environmental remediation and litigation costs the company inherited when it was spun off from Kerr-McGee Corp in 2006. A few months after spinning off Tronox, Kerr-McGee was acquired by Anadarko Petroleum Corp (APC.N).
Tronox has also been hit by a major decline in demand from the automotive and construction industries in the deepening global recession.
Last week the U.S. operations of LyondellBasell [ACCEIN.UL], the world's third-largest petrochemical company, filed for bankruptcy protection under the weight of overwhelming debt payments and declining demand.
The Tronox case is In re Tronox Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-10156. (Reporting by Chelsea Emery; editing by John Wallace)
