As part of its bankruptcy proceeding, Rennie Petroleum Corp. said it would sell its chain of 24 convenience stores along with its motor fuels supply agreements to an additional six stores through an auction to be managed by Matrix Capital Markets Group Inc.
The auction of the Richmond, Va. chain, which operates stores throughout central and eastern Virginia, is the result of a sale motion the company submitted in its Chapter 11 Case in the U.S. Bankruptcy Court for the Eastern District of Virginia. However, the stores are being sold free and clear of liens, claims, and encumbrances.
Two of the company’s c-store properties are owned, with the remaining 22 subject to third-party lease agreements. Rennie operates six of the convenience stores, has commissioned dealers in 11 stores and full dealers in seven units. In addition, the company has supply agreements for an additional six locations, but does not have any property interest in those locations.
In 2006, the company sold more than 35 million gallons of motor fuels, with the vast majority of the locations retailing under the CITGO brand. In addition, two of the stores offer Shell branded fuels and one sells fuels under the Rennie name. This sale is not contingent on a buyer assuming a motor fuels supply agreement from the company and a buyer does not have to keep the stores branded as they currently are.
The average lot size for the 24 stores where Rennie’s controls a property interest is approximately one acre with an average building size of over 1,500 square feet.
The sale of the Rennie’s chain presents an ideal opportunity for a strategic or individual buyer seeking to grow in the convenience store and motor fuels distribution industry. For a strategic buyer seeking to acquire multiple locations, it is also possible that a major oil company would be willing to re-brand the locations in exchange for a long-term supply agreement.
According to the preliminary sale procedures, which are subject to approval by the court, bids can be submitted on individual stores and supply agreements, a combination of stores and supply agreements or for all of the stores and supply agreements. All bids must be submitted on or before 5 p.m. on Sept. 21. Bidders submitting qualified bids, as defined in the sale procedures motion will be invited to the auction to be held in Richmond, Virginia on Oct. 2.
To receive a bid package and for more information on the stores and the bidding and auction process, please visit the Matrix Capital Markets Group Online website www.matrixcapitalonline.com/index.html or contact Cedric Fortemps at 804-591-2039.