VISA Steel Ltd. (BSE: 532721 and NSE: VISASTEEL) and SunCoke Energy (NYSE: SXC) said Nov. 20 that they have entered into agreements to form a cokemaking joint venture in India.
SunCoke Energy will invest about $67m to acquire a 49% interest in the joint venture. VISA Steel will hold the remaining 51%. The joint venture, which will be unlevered at closing, will consist of VISA Steel’s existing 400,000 tonnes per annum heat recovery coke plant and associated steam generation units at Kalinganagar in Odisha, India. The transaction is expected to close in the first quarter of 2013, subject to customary conditions, including approval from VISA Steel shareholders.
Vishambhar Saran, Chairman of VISA Steel said: “This is a great opportunity for VISA Steel to partner with SunCoke, known for its operating and technological expertise, to grow the coke business. The demand for coke from large and medium size steel producers has been increasing substantially and there is a potential to grow the coke business on a standalone basis.”
“We are pleased to partner with VISA Steel, a company with strong leadership in the steel and coke industry, to grow our international footprint and establish a cokemaking presence in India,” said Fritz Henderson, Chairman and CEO of SunCoke Energy. “We believe that the coke industry in India is a key market that offers us attractive growth opportunities.”
VISA Steel is a leading player in the Special Steel, Coke and Ferro Chrome industry in India with manufacturing facilities located at Kalinganagar Industrial Complex in Odisha.
SunCoke is the largest independent producer of metallurgical coke in the Americas, with coal-consuming coke plants in states like Virginia, Indiana, Illinois and Ohio. It also has coal mining operations, which have more than 114 million tons of proven and probable reserves, that are located in Virginia and West Virginia and primarily supply coal to its coke plant in Virginia.