Sunoco (SUN) announced that the spinoff of SunCoke Energy took another step towards completion last week, as the company filed an S-1 registration statement with the SEC. Many were nervous that the spin would be derailed due to litigation with ArcelorMittal (MT), one of SunCoke’s largest customers, however that issue appears to have been resolved via settlement. From the S-1:
In January 2011, we amended our Jewell and Haverhill coke sales agreements with ArcelorMittal to, among other things, extend their respective take-or-pay provisions through 2020. We entered into these amendments as part of our settlement with ArcelorMittal to resolve the lawsuit concerning coke pricing for our Jewell cokemaking facility. If these amendments had been in place during 2010, our pretax earnings would have been reduced by approximately $60 million. In February 2011, we entered into a settlement agreement with ArcelorMittal to resolve arbitration claims at our Indiana Harbor cokemaking facility. We do not expect this settlement to significantly impact our future income.
The spin is expected to be completed in 2011 via IPO, with 80% of the shares controlled by the parent and the remaining shares distributed to SUN shareholders. SunCoke will trade under the ticker SXC. To state the obvious, the prospectus (linked to above) is a must-read and full of useful information such as financials, reserve data and MD&A. We will keep you updated.
Disclosure: Author holds no position in any stock mentioned.