It looks like the SunCoke spinoff from Sunoco (SUN) might not be completed by the initial target date set by the company of 1H 2011. Ongoing litigation with one of their biggest customers, ArcelorMittal (MT – also a company on our spinoff radar), is the reason for the potential delay. Apparently, ArcelorMittal is claiming that SunCoke subsidiary Jewell Coke has been consistently overcharging them on a coke contract. While the two companies have been negotiating privately, no progress has been made yet with regards to a settlement. The trial is set to start in May 2011.
SunCoke is still preparing for the spin in the meantime and recently chose the Greater Chicago area for its new corporate headquarters. The company used to be based in Knoxville, Tenn, but wanted to relocate as part of the split from Sunoco. Additionally, the company desired a location near an international air travel hub in order to better service its customers and to “pursue growth on a global scale, and tap a broader pool of talent with industry-specific experience.” The Greater Chicago area seems to fit those criteria and I am sure the $4.8 million investment package thrown in by Illinois to support the project didn’t hurt.
We will keep you updated as more information is released and for our earlier discussion on the SunCoke spinoff, click here.
Disclosure: Author holds no position in any stock mentioned.
- SunCoke gets $4.8M from Illinois to relocate (knoxnews.com)