Dive Brief:
- Days after filing for Chapter 11 bankruptcy protection, convenience and fuel retailer Mountain Express Oil Co. is now exploring a sale of its assets, according to court documents and a source familiar with the matter.
- Mountain Express came to terms with its lenders Thursday through an emergency motion that authorized the retailer to obtain post-petition financing in the amount of $28.6 million, according to court documents. The agreement is voided if Mountain Express doesn’t achieve certain “milestones” towards selling the company.
- With a network that includes 171 company-operated retail and fueling centers and 27 travel centers in over half the U.S., a sale of Mountain Express’s assets promises to generate interest throughout the convenience store and fueling industries.
Dive Insight:
Although an eventual sale of the business isn’t guaranteed, Mountain Express “will proceed with a sale process” that is part of the company’s agreement with its lenders for the new financing, the source familiar with the situation confirmed to C-Store Dive.
If Mountain Express does undertake an outright sale of its business, it would likely happen during its ongoing bankruptcy case, Ted Gavin, managing director and founding partner of bankruptcy consultancy Gavin/Solmonese, said in an interview. He noted that in bankruptcy cases where milestones are part of the terms and conditions, they often include a timeline for the sale of the company.
That applies to Mountain Express, as well. According to court documents, the retailer has 55 days from its petition date of March 18 to establish bidding procedures for any sales of its assets and no more than 100 days to hold an auction for any sales. It must approve any sales resulting from the auction shortly after that and close any sales within 120 days.
When asked who a potential buyer of Mountain Express’s assets could be, Gavin noted the field is wide open, since anyone can attend a bankruptcy sale process as long as they have the finances to complete the transaction and sign a nondisclosure agreement.
“In a case like this of this size, I think it would be entirely expected that you would have private equity players, hedge fund players, competitors and other other businesses similar to [Mountain Express],” he said.
Alpharetta, Georgia-based Mountain Express Oil filed for bankruptcy about 17 months after it completed a $205 million debt financing to support its growth initiatives, which included reaching 100 company-operated stores by the end of 2021.
Upon declaring bankruptcy, the company said it would undertake a “comprehensive restructuring” intended to strengthen its retail segment, fuel distribution business and dealer network, with all company-owned or affiliated c-stores, travel centers and fuel centers operating as normal during the period.
