Earlier in the week, we started looking at the distressed debt of Tronox. What I want to do today is to show readers today in a step by step fashion how to create a valuation recovery model in Excel.
As a result of such analyses, review, discussions, considerations and assumptions, Rothschild estimates the total enterprise value (“TEV”) of Reorganized Tronox at approximately $975 million to $1,150 million, with a midpoint of $1,063 million. Rothschild reduced such TEV estimates by the estimated pro forma net debt levels of Reorganized Tronox (approximately $510-$517 million) to estimate the implied reorganized equity value of Reorganized Tronox. Rothschild estimates that Reorganized Tronox’s implied total reorganized equity value willrange from $458 million to $640 million.
- $165M in cash
- $130M in 15% Preferred Stock Convertible to an equity value 10% greater than plan value
- 7 year warrants convertible into 16.7% of reorganized Tronox at an implied equity value of $1.05B
- Certain Nevada assets
"Up to $145 million in Cash in the form of the Funded Environmental Amount (subject to decrease if total funded debt under the Exit Credit Facility on the Effective Date is less than $510 million, provided that in no event will the Funded Environmental Amount be less than $115 million in Cash as contemplated by the current committed exit financing)"So using the Enterprise Values above, here is what we get to (no one really has any idea what Nevada is worth so I skipped that part: