November 16, 2005
Mail Stop 7010
By U.S. Mail and facsimile to (405) 270-3649
Gregory F. Pilcher, Esq.
Senior Vice President, General Counsel and Secretary
Tronox Incorporated
Kerr-McGee Corporation
123 Robert S. Kerr Avenue
Oklahoma City, Oklahoma 73102
Re: Tronox Incorporated
Amendment No. 4 to Registration Statement on Form S-1
Filed November 9, 2005
File No. 333-125574
Dear Mr. Pilcher:
We have reviewed your filing and have the following
comments.
We welcome any questions you may have about our comments or any
other
aspect of our review. Feel free to call us at the telephone
numbers
listed at the end of this letter.
Cover Page
1. Please delete the reference to Lehman Brothers and J.P. Morgan
as
"Joint Book-Running Managers" on the front cover page of your
prospectus. Also, please delete the references to "senior co-
managers" and "co-managers."
Prospectus Summary, page 1
The Offering, page 9
2. We note your response to comment 13 of our letter dated July 1,
2005, as well as the disclosure appearing in Summary Historical
and
Pro Forma Combined Financial Data of Amendment No. 4. Revise your
summary discussion of the offering to disclose the aggregate value
of
the transaction to Kerr-McGee, including your transfer of "cash on
hand in excess of $40 million."
Summary Historical and Pro Forma Combined Financial Data, page 11
3. You state in footnote 4 on page 13 that cash flows from
operating
activities were reduced by $165 million related to the repurchase
of
previously sold accounts receivable. Our understanding is that
the
termination of the accounts receivable monetization program
resulted
in a one-time reduction in cash flows from operations of up to
$165
million from the date of termination until you began collecting on
post-termination accounts receivable. It appears that the time
lag
in collections resulting from the program termination contributed
to
the decrease in cash flows from operations. Please revise your
disclosures on pages 13 and 60 to clarify how cash flows from
operating activities were affected by the termination of the
accounts
receivable monetization program.
Risk Factors, page 16
Hazards associated with chemical manufacturing could adversely
affect. . . , page 18
4. We note your response to comment 4 in our letter dated November
7,
2005. Please revise to give investors a sense for the likelihood
of
the risk that you disclose in the paragraph following the bullet
points. For example, what leads you to believe that one or more
of
your key raw materials may be found to have toxicological or
health-
related impacts on the environment, customers, or employees? In
that
regard, we reissue comment 4.
Unaudited Pro Forma Combined Financial Statements, page 38
5. Please disclose the types of selling, general and
administrative
costs included in pro forma adjustment one.
6. Please revise to present the pro forma adjustments related to
the
receipt and use of offering proceeds in a separate column from
your
other pro forma adjustments.
7. Please revise the descriptions of pro forma adjustments two and
three to show the computation of each adjustment, including the
interest rates used for each debt instrument. If true, please
confirm that interest expense is based on current rates. Please
also
ensure that the final terms of the debt agreements are reflected
in
these adjustments and elsewhere in the document, including
discussion
of your debt covenants.
8. Please note that it is appropriate to give pro forma effect to
the
elimination of interest associated with historical amount due to
Kerr-McGee only to the extent that is eliminated by the pro forma
transactions. Further, your pro forma adjustment to eliminate
interest, calculated based on the amount due to Kerr-McGee as of a
recent date, may require downward adjustment unless the recent
amount
due is less than the amount due at any date during the periods
presented.
9. Please revise the description of pro forma adjustment 13 to
disclose the assumptions used to determine the plan obligation of
$442.3 million.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 44
10. Please delete the last sentence of the first paragraph under
the
heading "Overview" on page 44, as it refers to the deleted
reconciliation of adjusted EBITDA to operating cash flows.
Retirement Plans, page 115
11. Please consider adding a risk factor related to your
underfunded
U.S. retirement benefit plan. We note your revised disclosure
that
you anticipate your plan will now be underfunded by approximately
$14.4 million.
Description of Our Concurrent Financing Transactions, page 117
Unsecured Notes, page 118
12. Please describe any registration rights which will inure to
the
purchasers of the unsecured notes. If registration rights are
attached to the notes, disclose who will bear the cost of
registration.
The Rights Agreement, page 122
13. Has the board adopted the rights plan? If so, please revise
your
disclosure.
14. Please clarify who will receive the proceeds when holders of
the
rights exercise their rights to purchase.
Classified Board, page 125
15. Disclose the class that each board member will belong to upon
consummation of the offering.
Condensed Combined Statement of Cash Flows, page F-55
16. Please disclose the non-cash financing activity related to the
receivables repurchase, below the related non-cash investing
activity
on the face of your interim statement of cash flows.
Note 5 - Accounts Receivable Sales, page F-61
17. We have reviewed your response to comment nine. Please revise
the notes to your interim financial statements to discuss the
nature
of the error in your previously issued financial statements.
Please
also disclose in tabular form the impact that this restatement had
on
your previously reported cash flows for the six months ended June
30,
2005.
Exhibits
18. Please note that we will review the Underwriting Agreement,
the
Form of Credit Agreement, and the Form of Indenture prior to
accelerating the effectiveness of this registration statement and
that we may have comments pertaining to these exhibits once they
are
filed. Please file these exhibits with enough time for us to
review
them before requesting effectiveness.
Exhibit 5.1
19. Please have counsel revise to opine that the preferred share
purchase rights are binding obligations of the company.
20. In the last sentence of the second paragraph, please have
counsel
revise to clarify that counsel has relied as to certain factual
matters.
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Scott Watkinson, Staff Accountant, at (202)
551-3741 or Rufus Decker, Accounting Branch Chief, at (202) 551-
3769
if you have questions regarding comments on the financial
statements
and related matters. Please contact Matt Franker, Staff Attorney,
at
(202) 551-3749 or Lesli Sheppard, Senior Staff Attorney, at (202)
551-3708 with any other questions. Alternatively, you may contact
me
at (202) 551-3760.
Sincerely,
Pamela A. Long
Assistant Director
cc: David B.H. Martin, Esq. (via facsimile 202/662-6000)
Covington & Burling
1201 Pennsylvania Avenue, N.W.
Washington, DC 20004-2401
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Gregory F. Pilcher, Esq.
Tronox, Inc.
November 16, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE