LISLE, Ill. (AP) -- SunCoke Energy Inc.'s stock climbed Friday as the board of the coal producer approved forming a master limited partnership and creating an initial public offering for it.
THE SPARK: A master limited partnership is a limited partnership that is publicly traded. It gets most of its cash flow from real estate, natural resources and commodities. There are certain tax benefits of such partnerships that some investors find attractive.
Late Thursday SunCoke said that the master limited partnership will likely include part of its interests in cokemaking plants in Franklin Furnace and Middletown, Ohio. SunCoke would own the general partner of the proposed master limited partnership, SunCoke Energy Partners, LP.
The IPO of the master limited partnership is not expected to close earlier than the fourth quarter. SunCoke anticipates receiving a cash distribution from part of the offering proceeds. It plans to use the distribution's proceeds to eliminate debt and finance expansion projects, and for general corporate purposes.
STOCK ACTION: Shares of the Lisle, Ill., company added 39 cents, or 2.6 percent, to $15.41 in afternoon trading. The stock has traded in a 52-week range of $9.20 to $18. For the year to date, the shares are up 31 percent.