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    Improved Uni-Marts Generates "Overwhelming" Interest from Buyers

    After Atlantis Petroleum could not get funding to complete sale, company restructured expenses and expects to field new offers.

    By Mehgan Belanger

    STATE COLLEGE, Pa. – After renegotiating it rent and lease obligations, bankrupt convenience store chain, Uni-Marts, has generated an “overwhelming” amount of interest from potential bidders in the first few days following the announcement that the company’s assets would be auctioned.

    Tom Kelso, managing director and principal for Matrix Capital Markets Group Inc., which is handling the sale of the stores, told CSNews Online Friday that "in the first 36 to 48 hours, we've been overwhelmed by calls and e-mails" relating to the Uni-Marts auction. "The interest so far is very strong."

    The auction of the company's assets—including 210 company- and dealer-operated sites with various fuel brands across Ohio, Pennsylvania and New York—follows the expiration of a September 2008 agreement where Wayne, Pa.-based Atlantis Petroleum LLC was approved by the court to be the stalking horse bidder that would purchase the Uni-Marts assets.

    In November of that year, the purchase agreement expired for Atlantis—which had submitted the only bid for Uni-Mart's assets, according to a court filing—as it had failed to secure funds to complete the purchase, despite an extension of the agreement by the court.

    Since the expiration of the Atlantis deal, Uni-Marts has negotiated its rent payments and lease obligations to reduce cost and risk. The result is that the company itself is "substantially more profitable and operating at a profit today," Kelso said. According to the sales motion filed with the court, Uni-Marts has been able to generate an almost $5 million reduction in Uni-Marts’ annual third-party lease hold expense going forward.

    A hearing to approve the current auction proceedings is scheduled for June 15. Kelso expected the court to approve the terms, which are similar to those that involved Atlantis.

    "We are looking first for a stalking horse, but potential buyers can buy some, all or individual stores," he said. "We'll look at offers in every configuration possible."

    Assets up for auction include 68 BP-branded sites; 30 Exxon-branded sites; 52-Uni-Mart-branded stores; 28 Choice Tobacco Outlet locations; one Mobil-branded site; and four unbranded assets. Within those, 27 do not offer fuel; 113 are company-owned and -operated; 21 are company-owned and dealer-operated; and 76 are dealer-owned and -operated.

    Some conditions for sale exist, such as the BP-branded sites in Ohio must remain with that brand of fuel, Kelso said, adding all other sites can be rebranded. The fate of the Uni-Marts name is uncertain, though, as it has not been decided as of press time if the name is available for sale as well.

    A stalking horse bidder would have to be interested in purchasing the entire company, or a significant part of the company, Kelso explained, emphasizing that any parties interested in being a stalking horse must act quickly.

    "We are not required to name a stalking horse, but if we were, the deadline to do it is before June 30. Anyone with an interest to be one needs to move very quickly," Kelso told CSNews Online. "There is a lot to do before we can name stalking horse, so every day is critical."

    Under the sales procedures submitted to the court, the deadline for other offers is Aug. 13, and an auction will be held Aug. 18. The dates are subject to court approval and could be changed.

    More information about the sale can be found on Matrix’s Web site—www.matrixcapitalonline.com/unimart/intro.htm.

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