"In connection with the ongoing support of our lenders, we have secured a long-term credit facility for our retail segment. This facility will provide us with a significant degree of financial flexibility to accommodate new-store construction, [image-nocss] store reimaging and strategic acquisitions," said Uzi Yemin, president and CEO of Delek US.
Delek US declined CSP Daily News' requests for additional comment.On Delek US's third-quarter 2010 earnings call, Yemin said, "During the fourth quarter, we intend to start [reimaging]; hopefully we'll finish as many as we can. We've already started another 27 stores. And then next year, we're planning to do anywhere between 20 and 35 stores. So by the end of next year, we'll have half of our fleet basically reimaged."
He added, "Not only we are going to reimage more stores next year, but we intend to build new stores. Right now, we have several mega stores that are performing very, very well.... Our goal is within...five years to [reimage]...all the stores that are good candidates for being reimaged, and building anywhere between...10 to 20 stores on a yearly basis in the next five years. So a very aggressive program."
As for acquisitions, Yemin said, "We are looking at opportunities in the marketplace."The retail segment has been a bright spot for Delek US. Overall, it reported a net loss from continuing operations of $9.9 million for its third-quarter 2010, versus a net loss of $4.8 million in its third-quarter 2009.
In early November, Yemin (pictured) said, "Although our consolidated results were impacted by downtime at the [Tyler, Texas] refinery, our retail segment continued to perform well during the third quarter, as it did during the first half of 2010. Same-store fuel [gallons] and merchandise sales grew above year-ago levels, while retail fuel margins remained strong." (Click here for previous CSP Daily News coverage.)
The facility extends and increases the existing revolver and extinguishes an associated term loan, both of which would have matured in April 2011.
The facility is structured to include a $200 million revolving credit limit; a $50 million letter of credit sublimit; and an accordion feature which permits an increase in borrowings of up to $275 million, subject to additional lender commitments. The facility will mature in December 2015.
Brentwood, Tenn.-based Delek US Holdings is a diversified energy business focused on petroleum refining, the marketing and supply of refined products, the retail marketing of refined products and the sale of general merchandise in its retail locations. The refining segment operates a high-conversion, independent refinery, with a design crude distillation capacity of 60,000 barrels per day, in Tyler, Texas. The marketing and supply segment markets refined products through its terminals in Abilene, Texas, and San Angelo, Texas, as well as other third-party terminals. The retail segment markets gasoline, diesel and other refined petroleum products and convenience merchandise through a network of company-operated retail fuel and convenience stores, operated under the MAPCO Express, MAPCO Mart, East Coast, Fast Food & Fuel, Favorite Markets, Delta Express and Discount Food Mart brand names.
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