Tronox Ltd. secured an option to acquire 90% of Advanced Metal Industries Cluster Co. Ltd.'s ownership in a titanium slag smelter facility in Saudi Arabia.
Tronox recently entered into an agreement to provide technical assistance services to AMIC to facilitate the smelter's startup.
AMIC is equally owned by The National Titanium Dioxide Co. Ltd. and National Industrialization Co., also known as Tasnee.
AMIC will create a special-purpose vehicle as part of the deal and transfer its stake and US$322 million of debt to the vehicle.
Tronox agreed to lend up to US$125 million for CapEx and operational expenses tied to starting up the smelter.
The compensation also includes a working capital adjustment and an adjustment to accurately compensate AMIC for 10% of the outstanding liabilities of the vehicle.
Tronox agreed to supply ilmenite to AMIC for the smelter in exchange for titanium slag it produces.
Tronox will exercise the 90% acquisition option after the smelter reaches sustained operations.