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Accounts Receivable Securitization Program
 3 Months Ended
Mar. 31, 2022
Transfers and Servicing [Abstract]  
Accounts Receivable Securitization Program Accounts Receivable Securitization Program
On March 15, 2022, the Company entered into an accounts receivable securitization arrangement (“Securitization Facility”) with a financial institution, through our wholly owned special purpose bankruptcy-remote subsidiary Tronox Securitization LLC (“ SPE”). The purpose of this arrangement is to enhance the Company's financial flexibility by providing additional liquidity. The Securitization Facility permits the SPE to sell accounts receivable up to $75 million (the “Facility Limit”). Under the Securitization Facility, our wholly owned U.S. operating subsidiary, Tronox LLC (“Originator”), sells its entire accounts receivable on a periodic basis to the SPE. The SPE in turn sells undivided interests in the portion of the receivables that meet certain eligibility criteria, pursuant to the terms of a receivable purchase agreement, to the administrative agent (acting on behalf of the purchaser) in exchange for cash, not to exceed the Facility Limit. The SPE retains the remaining receivables as unsold receivables which are pledged as a collateral for the sold receivables to which the purchaser is granted a first priority security interest.
Following the sale of the receivables by the Originator to the SPE, the receivables are legally isolated from Tronox and its affiliated entities, and upon the subsequent sale and transfer of the receivables from the SPE to the administrative agent, effective control of the receivables is passed to the purchaser, which has all rights, including the right to pledge or sell the receivables. Any new receivables that are not sold to the purchaser by the SPE are added to the unsold receivables held as collateral.
During March 2022, the Company sold accounts receivable having an aggregate face value of $75 million to the purchaser in exchange for cash proceeds of $75 million. At March 31, 2022, we also retained approximately $31 million of unsold receivables which we pledged as collateral for the sold receivables. As this transaction represents a true sale, we derecognized the sold receivables from our Condensed Consolidated Balance Sheet as of March 31, 2022 and classified the cash proceeds as source of cash provided by operating activities in our Condensed Consolidated Statement of Cash Flows. This transaction has a one year term which ends on March 14, 2023.