Sunoco Inc. (SUN) plans to move ahead with the separation of its
coking business after settling a lawsuit with customer
ArcelorMittal (MT) regarding pricing at one of its facilities.
Sunoco announced plans in June to separate its coking business,
which was a fast-growing, lucrative gem at a time when Sunoco has
struggled with its core refining assets. The move is expected to
allow Sunoco to focus on expanding its fuel logistics, retail and
marketing operations.
The settlement, retroactive to Jan. 1, includes the
renegotiation of the Virginia plant contract, among other things.
The settlement also extends so-called take or pay agreements,
expected to change in October 2012, at its Virginia and Ohio plants
through 2020, providing the coking business with a guaranteed
customer.
Sunoco expects the settlement to reduce 2012 earnings before
interest, taxes, depreciation and amortization by about $60 million
and it withdrew its prior SunCoke guidance.
Frederick A. "Fritz" Henderson, who will serve as chairman and
chief executive of SunCoke Energy upon its separation from Sunoco,
said, "The settlement is an important step in resolving a dispute
with our largest customer."
Henderson is former CEO of General Motors Co. (GM), where he
helped the company expand its operations in South Korea and China
before being appointed to head the European division in 2004. He
was named chief financial officer and vice chairman in 2006 and
elevated to the top executive spot in 2009.
The second-largest independent refiner behind Valero Energy
Corp. (VLO) in October reported that it swung to the black in its
third quarter, the second-straight period of profit as refiners
recover slowly from a recession that hit them hard.
Shares closed Friday at $43.46 and were inactive premarket.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com;