The State College, Pa.-based company filed for bankruptcy in late May 2008 (click here for previous CSP Daily News coverage). A purchase contract between Uni-Marts and Atlantis Petroleum previously selected to complete the acquisition of the assets expired without a transaction being consummated (click here for previous coverage).
Uni-Marts has elected to remarket the assets or equity of the reorganized debtor in a process managed by Matrix Capital Markets Group Inc., Richmond, Va.
The filing provided it with the ability to pursue a dual path to maximize returns available to its creditors as well as exploring opportunities to sell the company, Uni-Marts said at the time of its bankruptcy filing. A large proportion of the assets have undergone substantial changes related to operating expenses and business model since the Atlantis Petroleum bid expired, and these changes have substantially improved profitability, the company said.
Uni-Marts has successfully negotiated lower monthly rents on a substantial portion of its third-party leasehold assets. Asset level cash flows have improved as a result of the reduction in rent expense.
The company has assigned the majority of its third-party leasehold obligations to collect rents on dealer operated properties to the prime landlord, effectively removing Uni-Marts from the middle of the lease, and those dealers are now responsible to pay the third-party leasehold expenses directly to the prime landlord. As a result, Uni-Marts no longer earns rental income on these properties; however, the dealer remains contractually bound to Uni-Marts under fuel supply agreements.
An almost $5 million reduction in Uni-Marts' annual third-party leasehold expense has created a more efficient and economically viable core of assets than were available during the prior sale process, said Matrix.
The chain sold more than 121.2 million gallons of motor fuels and generated merchandise sales of more than $84.5 million through three distinct channels of trade for the 52-week period ended April 2, 2009.
Uni-Marts currently manages 113 assets as company-owned and -operated units. All of these assets sell traditional convenience merchandise items, and 96 of the assets offer motor fuels, of which 40 are major branded (BP, Exxon and Mobil) and the 56 are private branded (Uni-Mart, Choice or unbranded). Uni-Marts controls 27 of the assets via fee simple ownership of the real estate, while the remaining 86 are controlled via third-party leases. The assets accounted for 67.1 million gallons in motor fuels volume sold and $84.5 million in merchandise sales for the 52-week period.
After reopening assets previously operated by dealers as company-operated assets, the company said it budgets calendar yearend 2009 motor fuels volume of 72.2 million gallons and merchandise sales of $88.5 million.
Uni-Marts currently manages 21 assets as company-owned, dealer-operated units. Uni-Marts controls the asset's real estate either via fee simple ownership or third-party lease and subsequently leases or subleases the location to a third-party dealer/tenant who pays rent as well as pays for the motor fuels supplied by Uni-Marts. All of the assets sell traditional convenience merchandise items and18 of the assets offer motor fuels, of which 13 are major branded and the remaining five are private branded. One of the assets is fee simple real estate controlled while the remaining 20 are controlled via third-party leases.
These assets accounted for 9.6 million gallons in motor fuels volume sold and $975,000 net rental income (dealer/tenant rental income less Uni-Marts' third-party lease expense) for the 52-week period. The company budgets calendar yearend 2009 motor fuels volume of 10 million gallons and net rental income of $1 million.
Uni-Marts classifies 76 assets as dealer-owned, dealer-operated units. Uni-Marts has no control over the real estate at these assets; 69 of these assets offer motor fuels, of which 46 are major branded and the remaining 23 are private branded. Seven of the assets are accounted for as units where Uni-Marts collects trademark license and ATM fees. These 76 assets accounted for 44.6 million gallons in motor fuels volume sold for the 52-week period. The company said it budgets calendar yearend 2009 motor fuels volume of 46.2 million gallons.
The sale procedures are subject to court approval. Formal marketing for the opportunity to acquire Uni-Marts assets began June 3, 2009. The deadline for selection of a stalking horse is June 30, 2009. All other bids must be submitted by Aug. 13, 2009.
For additional information regarding the sale process, click here.
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