SemGroup Corp. has reached an agreement to sell its asphalt business, SemMaterials México, to Ergon Asfaltos México for an estimated US$70 million.
This figure includes a reimbursement of approximately US$15 million of net working capital, subject to customary post-closing adjustments.
The company intends to use the proceeds of the transaction towards its capital raise plan associated with the acquisition of Houston Fuel Oil Terminal Co. (HFOTCO) and to pre-fund capital growth projects.
“Divesting these non-core legacy assets is an important step as we raise capital and clearly define our portfolio of midstream services on the Gulf Coast, mid-continent and in Canada. As we enter 2018, we remain focused on executing our strategic plan, enhancing our balance sheet and paying the second HFOTCO payment,” said Carlin Conner, SemGroup President and Chief Executive Officer.
SemMaterials México is offering asphalt products, technology and pavement services to the Mexican market. The business includes 14 in-country terminals and two national laboratories.
The sale is expected to close early in 2Q18, subject to the receipt of certain governmental approvals and the satisfaction of other customary closing conditions.
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