SemGroup Plans Public Entity

Saturday, March 10th 2007, 2:21 pm
By: News On 6

TULSA, Okla. (AP) SemGroup LP, one of the nation's largest private companies, announced plans to launch a publicly traded entity.

Under the plans unveiled Friday, the Tulsa-based energy company would place some of its assets into a publicly traded partnership that would be listed on the Nasdaq Global Market under the ticker "SGLP."

The filing with the Securities and Exchange Commission proposes a public offering of 12.5 million units that would represent a limited partner interest in SemGroup Energy Partners LP.

SemGroup LP would remain a private company. The estimated $300 million proceeds of the initial public offering will be used to reduce debt of the parent company, officials said in a statement.

A company spokeswoman declined to comment Friday afternoon.

The new partnership also plans to borrow $137.7 million and distribute that to SemGroup Holdings, which is owned by the parent company.

SemGroup Holdings also will control 8.2 million subordinated units and 421,535 general partner units.

The new partnership, to be based in Tulsa, expects to make quarterly distributions of 33.75 cents per common unit, according to the SEC filing.

"We intend to acquire and construct a significant amount of additional midstream energy assets, including acquisitions form our parent and jointly with our parent," the company wrote in the filing.

SemGroup employs nearly 2,000 people, including about 400 in Tulsa. The company specializes in products and services that move products from the wellhead to the wholesale marketplace.

It was founded in 2000 with just six employees and has since spent about $955 million in 45 separate acquisitions.

After the IPO, SemGroup Energy Partners would own and operate facilities with about 6.7 million barrels of storage capacity, including about 4.8 million barrels at the Cushing Interchange; two pipeline systems that stretch a total of 1,120 miles; and gathering and transport systems.

Last year, Forbes magazine ranked SemGroup, which has $4.5 billion in assets, as the nation's fifth-largest private company.