SunCoke Energy, Inc 8-K/A, filed Jul 15, 2020
SunCoke Energy, Inc. (SXC)
About this 8-K/A
SunCoke Energy, Inc filed this 8-K/A on July 15, 2020, reporting on events of July 8, 2020.
Items reported
- Item 1.01: Entered into a material agreement
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EXPLANATORY NOTE
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| Item 1.01. | Entry into a Material Definitive Agreement. |
As previously disclosed, SunCoke Energy, Inc. (the “Company”) has been engaged in discussions with its steelmaking customers regarding market challenges presented by the current COVID-19 global pandemic. These discussions have addressed potential near-term coke supply relief for customers, in exchange for a restructuring and extending of existing contracts.
On July 8, 2020, the Company announced that the Company’s Haverhill Coke Company LLC subsidiary located in Franklin Furnace, Ohio (“Haverhill”) and AK Steel Corporation (“AK Steel”) have amended their existing Coke Purchase Agreement (the “Coke Purchase Agreement”) to extend the term of this agreement by 18 months, such that the Coke Purchase Agreement will expire on June 30, 2023, instead of December 31, 2021. This amendment to the Coke Purchase Agreement takes effect July 8, 2020.
The parties also have agreed to: (i) reduce AK Steel’s coke purchase obligation and Haverhill’s coke supply obligation for the remainder of the 2020 contract year by approximately 125,000 tons; and (ii) reduce, by approximately 75,000 tons, for the 2020 contract year, AK Steel’s obligation to purchase coke produced by the Company’s Middletown Coke Company LLC subsidiary located in Middletown, Ohio.
Other key provisions of the Coke Purchase Agreement, including pass-through of coal costs, reimbursement of operating and maintenance expenses subject to certain metrics, and pricing remain unchanged. The foregoing brief description of the amendment is qualified in its entirety by reference to the amendment, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the period ending June 30, 2020.
The energy supply agreement, whereby AK Steel purchases electricity produced from Haverhill’s cogeneration plant, will expire in 2021. Following the expiration of this energy supply agreement, Haverhill intends to continue to generate electricity for sale at prevailing market rates, either into the regional power market or to AK Steel.
Some of the statements contained in this report 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), including statements expectations regarding the Coke Purchase Agreement, as amended. Such statements are based on the current knowledge, beliefs and expectations of the Company, and the Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include, but are not limited to, domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting the Company, as well as other risks and uncertainties described in the Company’s annual and quarterly reports and current reports on Form 8-K filed with the Securities and Exchange Commission.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNCOKE ENERGY, INC. | ||
| By: |
/s/ Fay West | |
| Fay West | ||
| Senior Vice President and Chief Financial Officer | ||
Date: July 14, 2020
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