UPDATE 1-SunCoke Energy plans to sell coal mining business
March 11 (Reuters) - SunCoke Energy Inc, which produces coke used in steelmaking, said it plans to sell its coal mines and transfer its domestic coke business to its master limited partnership.
SunCoke said it would initially transfer a 33 percent interest in its Haverhill and Middletown cokemaking facilities in Ohio to SunCoke Energy Partners LP.
A master limited partnership is a tax-friendly structure that pays out most of its cash flow to shareholders.
Coal companies have been hit by weak demand from steelmakers that has led to a steep fall in prices.
Revenue from Suncoke's coal mining operations fell 15 percent to $47 million in the fourth quarter ended Dec. 31, accounting for about 12 percent of total revenue.
"While our coal mining team has delivered significant improvement in productivity, safety and production costs, we believe shareholder value will increase if we exit this business," SunCoke Chief Executive Fritz Henderson said in a statement on Tuesday.
The company has hired an adviser for the sale, he said.
Suncoke's coal mining operations, which have more than 110 million tons of proven and probable reserves, are located in Virginia and West Virginia.
Apart from the two coke plants to be initially transferred to the MLP, the company has plants in Virginia, Indiana and Illinois as well as in Brazil and India.
SunCoke Energy's shares closed at $23.01 on Monday on the New York Stock Exchange, while SunCoke Energy Partners closed at $30.49.
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