SunCoke to spin off interests in two coke plants into MLP

SunCoke Energy (NYSE: SXC), a producer of both metallurgical coke and coal, said July 19 that its Board of Directors has approved the formation of a Master Limited Partnership (MLP) and the filing of a registration statement to effect the initial public offering (IPO) of the MLP.

The key assets of the MLP are expected to be a portion of SunCoke Energy’s interests in each of its Haverhill and Middletown cokemaking facilities, located in Franklin Furnace, Ohio and Middletown, Ohio, respectively. These plants bake met coal into coke for the steel industry. SunCoke Energy would own the general partner of the proposed MLP, SunCoke Energy Partners LP, as well as all of the MLP incentive distribution rights and a portion of the units representing limited partner interests in the MLP.

SunCoke Energy expects to close the IPO of the MLP not earlier than the fourth quarter of 2012. Concurrently with the closing of the IPO, SunCoke Energy expects to receive a cash distribution from a portion of the net offering proceeds. SunCoke Energy said it intends to use the proceeds of that distribution to repay, repurchase or redeem outstanding debt, fund expansion projects and for general corporate purposes.

SunCoke Energy is the largest independent producer of metallurgical coke in the Americas. Its advanced, heat recovery cokemaking process produces high-quality coke for use in steelmaking, captures waste heat for derivative energy resale and meets or exceeds environmental standards. Its cokemaking facilities are located in Virginia, Indiana, Ohio, Illinois and Vitoria, Brazil, and the coal mining operations, which have more than 114 million tons of proven and probable reserves, are located in Virginia and West Virginia.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.