Tronox, a US producer of TiO2 that is in Chapter 11 bankruptcy, has terminated a ‘stalking horse’ agreement with Huntsman and its affiliates to purchase some of the assets and equity interests of Tronox and its subsidiaries. This came despite an increased bid from Huntsman.

Instead, an ad hoc group of Tronox’s unsecured bondholders has been granted an interim order from the US Bankruptcy Court authorizing the company to replace its existing senior secured financing and an order to enter into certain agreements as part of a restructuring transaction. Tronox also cancelled an auction that was scheduled to take place as part of the agreement with Huntsman.

Huntsman said that it had increased its original bid to a level it believed to be higher than that offered by the bondholders and would have taken this to the auction. CEO Peter Huntsman said that he was disappointed but added that “to prevail over the ad hoc bondholders, we would have to overpay for these assets”, which the company was not prepared to do.  It will now pursue alternative link-ups.