Appco officials and the management team of Titan Global Holdings, which bought Appco from Johnson City, Tenn., resident Jim MacLean, had hoped to complete the refinancing [image-nocss] this past week. Instead, Appco CEO Marty Anderson told the newspaper late Friday that "last-minute legal details" had pushed the deal back to today or Tuesday.
This left many of the convenience stores' crucial products--gasoline, lottery tickets (in the 24 Tennessee stores) and possibly cigarettes, which were going fast Friday--conspicuously absent from the chain's 55 stores over this past weekend, according to the report.
Ironically, in straight operating numbers, Appco made a profit of more than $20 million in Titan's fiscal year ending Aug. 31. But because of the debt Titan incurred when it bought Appco, the company needs credit to keep operating.
Anderson said he is concerned about Appco's 300-some employees but is confident the refinancing will set everything right. The lengthening crisis, though, has caused no small amount of worry for Appco employees and families.
Anderson is hoping the cash infusion will result in flowing gas pumps within 24 hours of money hitting Appco's bank, with other scarce products (including lottery tickets) back to normal within a week inside the stores, where shelves have grown emptier by the day.
At this point, the recovery effort will include restoring vendor relationships that Anderson admitted Friday had become "strained" of late as Appco became unable to pay all its bills, the newspaper reported. He described the Tennessee Lottery's removal of its products as "due to nonpayment of a small invoice" and said the lottery would be reinstated in the 24 Tennessee stores upon completion of the refinance.
The trouble began early in December, and by mid-December Appco had suspended the contracts of dozens of independent convenience stores for which it normally provides gas.
Anderson and Titan Global Holdings CEO Bryan Chance acknowledged as much on Dec. 24 but insisted the situation was due for a quick turnaround.
"The profitability and viability of this company is very strong," Anderson said on Dec. 24. "We had a very good year, but our lines of credit have been squeezed down by our lender because of their difficulty getting credit."
Anderson said Titan was working on a refinance of its debt associated with Appco to get "sufficient working capital to meet our needs," and he expected that to be completed "any day or in the next week or two."
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