April 4, 2019
Katherine T. Gates
General Counsel
SunCoke Energy, Inc.
1011 Warrenville Road, Suite 600
Lisle, IL 60532
Re: SunCoke Energy, Inc.
Registration Statement on Form S-4
Filed March 8, 2019
File No. 333-230166
Dear Ms. Gates:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Form S-4 filed March 8, 2019
General
1. Where a comment keyed to the Form S-4 also applies to the December 31,
2018 Forms
10-K of SunCoke and/or SXCP, please address or revise therein
accordingly.
2. Please provide us supplementally with copies of any board books or
similar materials
prepared by the financial advisors and shared with the SXCP Conflicts
Committee, SunCoke Board, and its representatives.
3. Your disclosure indicates SXCP unitholders owning approximately 61.7% of
SXCP's
outstanding common units have entered into a Support Agreement are
irrevocably and
unconditionally bound to deliver a written consent to vote their units
in favor of the
merger. Because of this, it appears that SXCP stockholders have already
made an
Katherine T. Gates
SunCoke Energy, Inc.
April 4, 2019
Page 2
investment decision with respect to the issuance of Suncoke shares.
Please advise us why
you believe it is appropriate to register the issuance of such shares
on this Form S-4 at this
time. Refer to Securities Act Sections CDI 239.13.
Risk Factors, page 19
4. You disclose in your December 31, 2018 Form 10-K that AK Steel intends
to permanently
close its Ashland Works Plant by the end of 2019 and you believe AK
Steel has not and
would not satisfy the second criterion of the termination clause.
Based on your disclosure
on page 73 therein, AK Steel accounted for 26% of your sales and other
operating revenue
for 2018. Please tell us whether AK Steel has terminated or intends to
terminate their
take-or-pay supply agreements with you. If so, please amend your
filing to discuss the
potential negative impact to sales and cash flows. Refer to Sections
501.12.b. and
501.13.a. of the Financial Reporting Codification for guidance. If you
continue to believe
that AK Steel has not and would not satisfy the second criterion of
the termination clause,
please amend your filing to disclose the facts and circumstance
supporting your
conclusion.
5. We note your forum selection provision. Please disclose that such a
provision may limit a
shareholder's ability to bring a claim in a judicial forum that it
finds favorable for disputes
with the company and its directors, officers, or other employees and
may discourage
lawsuits with respect to such claims.
Recommendation of the SunCoke Board and Its Reasons for the Merger, page 54
6. Please expand your discussion of both SunCoke Energy, Inc. and SunCoke
Energy
Partners, L.P.'s reasons for the merger to quantify the cited benefits
and negative factors.
The Merger Agreement, page 72
7. Please provide a pre-Transaction organization chart of the consolidated
entity, SunCoke
Energy, Inc. as well as as a chart of all entities after the Transaction
has been completed.
After consummation, disclose the legal status of SXCP, i.e., whether it
will remain a
partnership as a wholly owned subsidiary of SunCoke. Explain how you
have
considered, if at all, the Final Regulations described in further detail
in the December 31,
2018 Forms 10-K of SunkCoke and SXCP, in your pro forma accounting for
income
taxes. In this regard, we note that pursuant to the Final Regulations, a
limited partnership
will be taxed retroactively as if it were a corporation at federal and
state tax rates at the
FirstName LastNameKatherine T. period, but if SXCP will no longer be a separate
entity, explain
end of a ten-year transition Gates
Comapany NameSunCoke Energy,already recorded for the expected impact thereof
remain
how the historical amounts Inc.
April 4, 2019 Page for pro forma presentation purposes.
appropriate 2
FirstName LastName
Katherine T. Gates
FirstName LastNameKatherine T. Gates
SunCoke Energy, Inc.
Comapany NameSunCoke Energy, Inc.
April 4, 2019
April 3 2019 Page 3
Page 4,
FirstName LastName
Description of SunCoke Common Stock
Exclusive Forum, page 104
8. We note that your forum selection provision identifies the Court of
Chancery of the State
of Delaware (or other state court located within the State of Delaware
or, if no state court
located within the State of Delaware has jurisdiction, then the
federal district court for the
District of Delaware) as the exclusive forum for certain litigation,
including any
"derivative action." Please disclose whether this provision applies to
actions arising under
the Securities Act or Exchange Act. If so, please also state that
there is uncertainty as to
whether a court would enforce such provision. If the provision applies
to Securities Act
claims, please also state that stockholders will not be deemed to have
waived the
company's compliance with the federal securities laws and the rules
and regulations
thereunder. In that regard, we note that Section 22 of the Securities
Act creates concurrent
jurisdiction for federal and state courts over all suits brought to
enforce any duty or
liability created by the Securities Act or the rules and regulations
thereunder.
Unaudited Pro Forma Condensed Consolidated Financial Statements, page F-2
9. As disclosed herein, since the SunCoke historical financial
information includes the
accounts of SXCP, the historical financial information of SXCP has not
been shown
separately. As such, please provide tables of the major captions
included in the pro forma
financial statements that reconcile SXCP historical data to SunCoke
data, i.e., the first
column in the pro forma financial statements, and identify and
describe material
reconciling items. For example, explain the makeup of the $558.8
million difference
between SXCP sales as of December 31, 2018 of $892.1 million to the
$1,450.9 million in
sales for the consolidated entity presented on page F-4. The
description of the merger
parties on page 84 does not appear to provide information specific
enough
to sufficiently distinguish between the nature of the two businesses.
In this regard, it may
help to list the facilities owned, leased and/or operated by each
entity and to describe the
activities conducted at each, identifying any overlap as necessary.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Katherine T. Gates
SunCoke Energy, Inc.
April 4, 2019
Page 4
You may contact Tracey McKoy, Staff Accountant, at (202) 551-3772 or
Jenn Do, Staff
Accountant, at (202) 551-3743 if you have questions regarding comments on the
financial
statements and related matters. Please contact Sergio Chinos, Staff Attorney,
at (202) 551-
7844 or Jay Ingram, Legal Branch Chief, at (202) 551-3397 with any other
questions.
Sincerely,
FirstName LastNameKatherine T. Gates Division of
Corporation Finance
Office of
Manufacturing and
Comapany NameSunCoke Energy, Inc.
Construction
April 4, 2019 Page 4
cc: Michael Swidler
FirstName LastName