Tuesday, July 14, 2009
Appco Nears Sale
Source: Convenience Store News
GREENVILLE, Tenn. - The sale of Appalachian Oil Co.'s (Appco) assets moved a little closer to realization as the real estate company leading the sale of the bankrupt convenience store chain mulls over bids this week.
According to a report by TimesNews.net, Appco's Chief Restructuring Officer Andy Weber said Friday he is hopeful the company's 47 c-stores will still be in operation and turning a profit for new owners in the not-too-distant future.
"The sales procedures approved by the court require a closing within 30 days, so our expectation would be that by the middle of August a transition would take place with the new ownership," Weber said Friday.
Appco filed for Chapter 11 protection Feb. 9 and Weber, who works for Chicago-based NRC Reality Advisors, was appointed April 14, to oversee the bid and sale process. Weber said "We hope to have a final selection by the end of next week (this Friday)."
According to Weber, it is still uncertain whether all the stores will be acquired by one company, or if they will be split up among several purchasers. Appco's nearly $20 million in pre-bankruptcy debts include more than $11 million in "secured debt" to lender Greystone Business Credit, and more than $7 million in debt to dozens of unsecured creditors ranging from gasoline suppliers and landlords to Western Union and Pet Dairy, said the report.
Appco was originally purchased for $30 million by Dallas-based Titan Global Holdings in a leveraged buyout deal in September 2007. At the time, the company consisted by about 55 stores in Northeast Tennessee, Southwest Virginia and Southeast Kentucky, and supplied fuel to about 165 independent convenience stores as well.
After the sale, longtime owner Jim MacLean retained ownership of some of the store buildings and real estate, while Titan immediately sold the buildings and property it obtained for $15 million to pay down debt, according to the report.
Titan, though, experienced financial difficulties with various other companies it owned and soon Appco's profits became the main entity funding Titan itself, according to Timesnews.net. With Titan siphoning off more than $3 million in a one-year period, Appco ran into trouble-especially as oil and gas prices soared in 2008.
In December, the Tennessee company could no longer supply its independent dealers, and fell behind on its bills. Titan continued to run the company after the February bankruptcy filing, but it quickly became clear that only a sale would result in credi