Exxaro has announced plans to start selling down its 42.7% stake in Tronox. The resources group says it’s commenced a public offering in the US of 16 million Class A ordinary shares in the NYSE-listed titanium dioxide and chemicals business. It’s also offering joint book-running managers and underwriters JP Morgan, Barclays and Morgan Stanley a 30-day option to buy a further 2.4 million shares.
Excluding the offer to the book runners, this will reduce Exxaro’s stake in Tronox to about 29.4%. At yesterday’s share price, the 16 million shares are worth just over $345 million, or R4.7 billion.
In March, Exxaro said it wanted to monetise its stake in Tronox so it could focus on its core South African coal assets, provide funding for its future capital commitments, repay debt and return capital to shareholders. It says it will continue to reduce its holding in Tronox, subject to market conditions. Following the first managed sale of shares, it will reduce its representation on the Tronox board to two directors, from three.