LISLE, Ill.--(BUSINESS WIRE)--
SunCoke Energy, Inc. (NYSE: SXC) has divested its coal mining business
to Revelation Energy, LLC in a transaction that includes substantially
all of SXC’s remaining coal mining assets, mineral leases, real estate
and mining reclamation costs. Under the terms of the deal, which closed
April 6, Revelation Energy will receive approximately $10.3 million from
SXC to take ownership of the assets and associated costs. In conjunction
with the transaction, Revelation Energy and SunCoke’s Jewell Coke
operations have entered into a coal supply agreement whereby Revelation
will deliver approximately 300,000 tons to Jewell Coke annually for the
next five years at a favorable delivered cost as compared to alternative
coal sources, which is intended to provide a cost-effective, local
supply of high-quality, mid-vol metallurgical coal. SunCoke also expects
to incur approximately $2 million of transaction-related costs.
The transaction is expected to be cash flow neutral to SunCoke by the
end of 2017 based on avoided potential mine closure and reclamation
costs of approximately $12 million. In addition, as compared to
potentially closing its mines, SXC expects to realize approximately $2
million to $3 million per year of lower administrative, regulatory,
compliance and purchased coal costs through 2020, as well as reduce its
mining-related liabilities and collateral requirements.
”Despite our aggressive efforts to reduce costs by rationalizing our
mining footprint, the drastic and sustained decline in coal prices will
likely prevent us from generating positive cash flow from our mining
operations for the foreseeable future,” said Fritz Henderson, Chairman,
President and CEO of SunCoke Energy, Inc. ”We believe this
value-positive sale will improve our long-term cash flow and allow us to
focus on our core cokemaking and coal logistics businesses.”
The deal excludes SunCoke’s legacy black lung and workers’ compensation
liabilities, and certain properties that are necessary for Jewell Coke’s
operation or were unavailable for transfer based on contractual
provisions. SunCoke may transfer other properties to Revelation Energy
after closing, subject to required consents, for additional payment to
Revelation of up to $0.7 million. The mining assets acquired by
Revelation are located primarily in Buchanan and Tazewell counties in
southwest Virginia.
For further information about the transaction, visit SXC’s Coal
Divestiture page in the Investor Resources section on www.suncoke.com.
ABOUT SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to the
integrated steel industry under long-term, take-or-pay contracts that
pass through commodity and certain operating costs to customers. We
utilize an innovative heat-recovery cokemaking technology that captures
excess heat for steam or electrical power generation. We are the sponsor
of SunCoke Energy Partners, L.P. (NYSE: SXCP), a publicly traded master
limited partnership, holding a 2 percent general partner interest,
55 percent limited partnership interest and all of the incentive
distribution rights. Our cokemaking facilities are located in Illinois,
Indiana, Ohio, Virginia, Brazil and India. To learn more about SunCoke
Energy, Inc., visit our website at www.suncoke.com.
FORWARD-LOOKING STATEMENTS
Some of the statements included in this press release constitute
“forward-looking statements” (as defined in Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended). Forward-looking statements include
all statements that are not historical facts and may be identified by
the use of such words as “believe,” “expect,” “plan,” “project,”
“intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,”
“may,” “will,” “should” or the negative of these terms or similar
expressions. Forward-looking statements are inherently uncertain and
involve significant known and unknown risks and uncertainties (many of
which are beyond the control of SXC) that could cause actual results to
differ materially.
Such risks and uncertainties include, but are not limited to domestic
and international economic, political, business, operational,
competitive, regulatory and/or market factors affecting SXC, as well as
uncertainties related to: pending or future litigation, legislation or
regulatory actions; liability for remedial actions or assessments under
existing or future environmental regulations; gains and losses related
to acquisition, disposition or impairment of assets; recapitalizations;
access to, and costs of, capital; the effects of changes in accounting
rules applicable to SXC; and changes in tax, environmental and other
laws and regulations applicable to SXC's businesses.
Forward-looking statements are not guarantees of future performance, but
are based upon the current knowledge, beliefs and expectations of SXC
management, and upon assumptions by SXC concerning future conditions,
any or all of which ultimately may prove to be inaccurate. The reader
should not place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. SXC does not
intend, and expressly disclaims any obligation, to update or alter its
forward-looking statements (or associated cautionary language), whether
as a result of new information, future events or otherwise after the
date of this press release except as required by applicable law.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, SXC has included in its filings with the
Securities and Exchange Commission cautionary language identifying
important factors (but not necessarily all the important factors) that
could cause actual results to differ materially from those expressed in
any forward-looking statement made by SXC. For information concerning
these factors, see SXC's Securities and Exchange Commission filings such
as its annual and quarterly reports and current reports on Form 8-K,
copies of which are available free of charge on SXC's website at www.suncoke.com.
All forward-looking statements included in this press release are
expressly qualified in their entirety by such cautionary statements.
Unpredictable or unknown factors not discussed in this release also
could have material adverse effects on forward-looking statements.
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Source: SunCoke Energy, Inc.