EZ Energy Raising Capital

EZ Energy Ltd.’s U.S. subsidiary EZ Energy USA Inc. has signed a letter
of intent to sell up to 17 gas stations and convenience stores to a
real estate investment trust (REIT) for up to $20.7 million. The
properties were previously purchased from BP Products North America
Inc. $15.5 million. EZ Energy will lease back the properties in a 20
year contract. If the company sells all 17 properties, it will pay
$1.85 million in annual rent.

The company previously bought 40 gas stations and convenience stores for $37 million in March and April.

In May, EZ Energy acquired 13 stores for $12.7 million plus
inventory. The company promised to operate the convenience stores and
gas stations for 20 years under the seller’s brand and franchise and to
rebrand 12 of the stores at a cost of $2.5-3.7 million. It also paid a
one-time franchise fee of $30,000 per store ($360,000 altogether), plus
8% of the stores’ turnover. The name of the seller in that deal was not
disclosed, but the stores posted $12.9 million revenue and the gas
stations sold 31.6 million gallons in 2006.


Speak Your Mind