UPDATE 1-Tronox says lenders extend waiver
(Adds details of waiver, background)
By Emily Chasan
NEW YORK, Nov 26 (Reuters) - Tronox Inc TROXA.PK, a maker of titanium dioxide pigment used in paint, coatings, plastic and paper, said on Wednesday it has negotiated a waiver extension with its lenders to avoid defaulting on a credit agreement.
In a filing with the U.S. Securities and Exchange Commission on Wednesday, the company said the waiver extension took effect on Nov. 25, and would last until the earlier of either Dec. 5, or if any other event of default, that is not being waived, took place. The waiver extended an earlier waiver the company entered into with the lenders on Oct. 28.
Oklahoma City-based Tronox, which calls itself the world's third-largest producer of titanium dioxide pigment, says it has an annual production capacity of 642,000 tons of the chemical. It has five pigment plants in the United States, Australia, Germany and The Netherlands.
Waivers often allow companies to work out a deal with their lenders, but waivers sometimes precede bankruptcy filings.
A Tronox representative on Wednesday declined to comment on whether the company was considering filing for bankruptcy protection.
Its lenders, led by Lehman Brothers Inc and Credit Suisse, also include ABN Amro Bank, JPMorgan Chase Bank and Citicorp USA Inc, according to the filing.
Since August, all three major credit rating agencies have downgraded the company's debt. Interest of about $16 million is due on its $350 million senior unsecured bonds on Dec. 1, according to the rating agencies.
In its downgrade earlier this month, Fitch said growth rate projections for titanium dioxide "are modest" and tend to track overall economic activity. Fitch said the company has reduced headcount, cut its dividend and reduced capital spending. Since September the company has also raised prices for titanium dioxide around the world.
The company's shares traded at 7 cents in the over-the-counter market on Wednesday. (Reporting by Emily Chasan; Editing by Tim Dobbyn)
