Purchase Agreement
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 incorporated entity 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”).
Conditions to the Transaction
The parties’ obligations to complete the Transaction are subject to certain customary closing conditions, including:
The Purchase Agreement sets out a long stop date of May 13, 2021 (the “Initial Long Stop Date”), or such later date as the parties may mutually agree, for the
completion of the Transaction. The Purchase Agreement provides that the Purchaser must pay to the Seller a termination fee of $18 million if the Purchase
Agreement is terminated as a result of a failure to satisfy certain regulatory approvals set out in the Purchase Agreement prior to the
Initial Long Stop Date or if all conditions to closing have been satisfied by the Initial Longstop Date, but the Purchaser fails to comply with its
completion obligations (the “Termination Payment”). The Purchase Agreement further provides that the Initial Long Stop Date may be extended by the Purchaser until August 13, 2021 and then November 13, 2021 (each a “Long Stop Date
Extension”), and that the Termination Payment shall be increased by $1 million following each Long Stop Date Extension (provided that the amount of the
Termination Payment shall not exceed $20 million). The parties have agreed that the Termination Payment will be deposited in an escrow account.
Other Terms of the Transaction
The parties have each made customary warranties and covenants in the Purchase Agreement that are subject to specified exceptions and qualifications contained in the
Purchase Agreement. The covenants include, among others, the Seller’s obligation to operate the Business in the usual and ordinary course consistent with past practice in the period between the date of execution of the Purchase Agreement and the
completion of the Transaction and not to take certain specified actions during such period. Under the Purchase Agreement, the Seller and Purchaser also agree to indemnify one another against certain losses, with certain specified exceptions and
limitation.
The Company has agreed to guarantee the payment and performance obligations of the Purchaser under the Purchase Agreement and will fund the Transaction through existing
cash reserves.
Simultaneous with the closing of the Transaction, the parties will enter into certain ancillary agreements including a transitional services agreement and an ilmenite
supply agreement.
The foregoing description of the Purchase Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Purchase
Agreement, which will be filed as an amendment to this Current Report on Form 8-K as Exhibit 2.1 and will be incorporated herein by reference.