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ISRAEL -- EZ Energy Ltd., parent of EZ Energy USA Inc., is selling its U.S. gas station and convenience store holdings to an unnamed "foreign gas station operator." The deal carries a $64-million price tag.
According to Globes, the proceeds should cover all the company's debt to Israeli bondholders and the loans of EZ Energy USA. The company said it will offer to redeem all its bonds in full when the sale closes on Sept. 15. EZ Energy Ltd. is controlled by Eli Zahavi.
EZ Energy USA includes the management of 91 Easytrip gas stations and c-stores in Pennsylvania and Ohio. All told, the U.S. arm owes $17 million to a U.S. bank and Israel's Mustang Mezzanine Fund, as well as $26 million to its bondholders. After repaying these debts, the company expects to report a capital gain of $10 million on the sale, the reportnoted.
EZ Energy's bondholders were already readying for a debt settlement offer that would include a rescheduling of payments, Globes reported.
Zahavi founded EZ Energy in 2006 and held the debt issue in early 2007. The company began buying blocks of gas stations and convenience stores, and later sold the land to REITs in buy and lease-back deals. It continued to operate the properties, Globes said. However, the economic crisis, coupled with rising fuel prices, restrained EZ Energy's ability to buy more gas stations. As a result, the company posted losses of $5 million in 2011 and $2.4 million in the first quarter of 2012, according to the news outlet.
The company has been exploring several strategies, including requesting postponements on the repayment of the bonds principle and an attempted sale of the land 16 gas stations sit on.
In June, GPM Investments LLC, operator of the Fas Mart and Shore Stop convenience store chains, offered $15 million to purchase a 50-percent stake in EZ Energy USA, as CSNews Online previously reported. However, EZ Energy reportedly rejected the offer.