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SemGroup emerges from bankruptcy

December 02, 2009
Tulsa-based SemGroup has emerged from 16 months of bankruptcy with a new leader, a new corporate structure and a mission to rebuild its name.

One privately-held, SemGroup will be a publicly-traded company with secured lenders, including Bank of America, holding 95 percent of the company's value.

From the Tulsa World:

"It's a new day," CEO Norm Szydlowski said. "People will judge us by how we keep our promises and commitments."

SemGroup Corp. will hold sizable assets in storing and transporting oil, gathering and moving natural gas, and manufacturing and marketing asphalt. The company emerges with a $500 million line of credit and owns and operates facilities in the U.S. mid-continent region, Canada, the United Kingdom and Mexico.

"What we see today is a new company," Szydlowski noted. "The creditors realized there's great value in keeping those assets together."

SemGroup LP filed for Chapter 11 bankruptcy in July 2008. The company, founded in 2000, grew quickly but amassed at least $2.4 billion in margin losses on oil futures trades and owed at least that much more to secured and unsecured creditors.

Originally, SemGroup officials talked about selling all assets to pay off those creditors. Auctions found buyers for most of the SemMaterials domestic asphalt division and the SemFuels refined petroleum storage unit.

Beginning this year, however, information trickled out that SemGroup planned to survive and emerge as a leaner, publicly traded firm focused mostly on its SemCrude unit.

Delaware Federal Judge Brendan L. Shannon signed off on SemGroup's reorganization plan in October. Creditors previously approved the plan by a huge margin.

SemGroup's new structure will handle taxes at the corporate level and on dividends, as opposed to a master limited partnership that taxes proceeds paid out at the unitholder level. The company also plans to seek a listing on a stock index such as Nasdaq or the New York Stock Exchange by early next year, officials said.

Szydlowski, known for his advisory work in helping rebuild Iraq's oil sector after the U.S. invasion and a longtime Chevron Corp. executive, replaces Terry Ronan, who stepped down after guiding SemGroup through the entire bankruptcy period. Ronan took the CEO reins when co-founder Tom Kivisto was placed on leave and later fired.

"Terry did an outstanding job of shepherding SemGroup through its reorganization and deserves tremendous credit for the success we are announcing today," Szydlowski said in a statement. "A good deal of credit also goes to Lisa Donahue, SemGroup's chief restructuring officer, and her colleagues from Alix Partners, our legal advisers, especially Martin Sosland from Weil Gotshal & Manges, and Steve Zelin and the entire team from the Blackstone Group."

SemGroup emerges with about 140 employees at its Tulsa headquarters and 1,000 companywide. The firm employed 400 in Tulsa and 2,000 nationwide in July 2008.
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