SemGroup To End SemMaterials Operations

Thursday, March 19th 2009, 3:39 pm
By: News On 6

By Ashli Sims, The News On 6

TULSA, OK -- Bankrupt SemGroup LP is shedding a division to try to keep the company afloat.

SemGroup is dissolving its asphalt division, and more than 100 jobs are hanging in the balance.

In the next couple of weeks, SemMaterials employees will find out whether they will be transferred or let go.

SemMaterials' 135 Tulsa employees were hanging their hopes on a deal to sell the company. But when one didn't materialize, owners say they had no choice but shut down the company.

Just last fall, the unit landed the contact to provide the asphalt to resurface Interstate 244.

The company that employs more than 500 people worldwide is being shut down by its parent company, SemGroup.

In a memo to employees, SemGroup CEO Terry Ronan says "the fact that employees have worked so hard makes this all the more difficult."

SemGroup filed for Chapter 11 bankruptcy last July after losing billions in oil futures. It's been reported that SemMaterials was costing its parent company $15 million a month.

Ronan says in the memo the company tried to sell the asphalt division without success. Six interested buyers were not able to get financing, and another third-party deal fell through.

Ronan says the only financially reasonable course of action is to wind down SemMaterials.

The memo says most, if not all of the SemMaterials employees, will be laid off, although some could be transferred to other divisions within the company.

A SemGroup spokeswoman had no specific details on how many of the Tulsa workers would be let go. She did say it probably wouldn't happen all at once because SemMaterials still has jobs and contracts it needs to fulfill.