DALLAS & IRVING, Texas -- Originally expected to close by the end of this year, 7-Eleven Inc.’s $3.3 billion purchase of more than 1,100 convenience stores from Sunoco LP has hit a road bump.
A group of bondholders has told Sunoco it intends to oppose the company’s attempt to change the terms of the credit pact governing about $1.6 billion of bonds—a step Sunoco has said is needed in order to complete the sale, Bloomberg reported, citing a letter it saw. The debtholders are demanding more money and better protections to agree to the changes in the bond indentures, a person familiar with the matter told Bloomberg.
On Oct. 10, Dallas-based Sunoco started the consent-solicitation process for $800 million of its 6.25% bonds maturing in 2021 and $800 million of its 6.375% bonds due in 2023. The amendment, for which the company is offering 1 percentage point in fees, would eliminate any requirement to have to repay the bonds because of triggering the change of control clause, Bloomberg reported.
Sunoco did not return a request for comment from CSP Daily News, and 7-Eleven declined to comment.
Irving, Texas-based 7-Eleven entered into an asset purchase agreement with Sunoco in April 2017 to acquire more than 1,100 of its c-stores in 18 states. The acquisition is one of the largest for 7-Eleven; it supports the chain’s growth strategy in areas such as Florida, the mid-Atlantic states, Northeast states and central Texas, Joe DePinto, president and CEO of 7-Eleven Inc., said at the time.
For Sunoco, the deal is a chance for the Dallas-based company to shift its focus away from retail and toward wholesale fuels distribution. “Led by the iconic Sunoco fuel brand and successful APlus franchise, Sunoco plans to be a leading consolidator in the domestic wholesale fuels business, supplying fuel to a network of more than 8,900 locations of third-party dealers, distributors and other commercial customers,” Sunoco spokesperson Alyson Gomez previously told CSP Daily News.
Sunoco LP is a master limited partnership that operates 1,353 convenience stores and retail fuel sites and distributes motor fuel to 7,937 convenience stores, independent dealers, commercial customers and distributors in 30 states.
7-Eleven Inc. operates, franchises or licenses 10,900 c-stores in North America, including nearly 9,000 in the United States.
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