SunCoke sells equity interest of Brazil facility for $41 million

LISLE - SunCoke Energy announced it has completed the sale of its equity interest of Sol Coqueria Tubarao S.A. to ArcelorMittal Brasil S.A. for approximately $41 million.

SunCoke received $20.5 million in cash at closing and will receive the remaining $20.5 million in cash, plus accrued interest, on April 1, 2017. Under the coke plant shareholders agreement, ArcelorMittal had the right to call the preferred interest at par in 2023 and as such, the parties negotiated an acceleration of that right.

With the redemption, SunCoke will no longer receive its approximately $9.5 million annual dividend from ArcelorMittal.

Additionally, starting in 2016, SunCoke will receive an incremental $5.1 million in technology fees per year through 2023 related to the addition of certain patents to its existing intellectual property licensing agreement, which are currently in use by ArcelorMittal at the Brazil facility. SunCoke will continue to earn existing operating and technology fees of approximately $10 million per year through 2023 and when combined with the new $5.1 million in technology fees.

SunCoke will continue to operate the Brazil facility on behalf of ArcelorMittal. The heat-recovery coke plant produces approximately 1.7 million tons of high-quality coke each year from its 320 ovens.