ArcelorMittal’s Brazilian operations redeemed interest at a coke joint venture (JV) it co-owns with ArcelorMittal Belgo and SunCoke, the latter announced.
The steelmaker redeemed SunCoke’s indirectly held preferred and common equity interest in Sol Coqueria Tubarao for a total of $41 million. SunCoke said it received $20.5 million in cash at closing and will then receive the remaining $20.5 million also in cash, “plus accrued interest, on April 1, 2017.”
Under the terms of the shareholder agreement, the Brazilian steel producer had the “right” to call its preferred interest at par or interest face value in 2023, however, the steelmaker decided to anticipate such a right.
“With the redemption, SunCoke will no longer receive its approximately $9.5 million annual dividend from ArcelorMittal. Additionally, starting in 2016, SunCoke will receive an incremental $5.1 million in technology fees per year through 2023 related to the addition of certain patents to its existing intellectual property licensing agreement, which are currently in use by ArcelorMittal at the Brazil facility,” SunCoke explained.
SunCoke said it will “continue to earn existing operating and technology fees of approximately $10 million per year through 2023 and when combined with the new $5.1 million in technology fees, the total expected Adjusted EBITDA contribution from the Brazil facility is expected to be approximately $15 million per year.”
The heat-recovery JV coke plant produces some 1.7 million mt/year of coke from its 320 ovens.