Kiel Bros. Oil Co. (Columbus, Ind.), operator of 210 Tobacco Road convenience stores, has filed for protection in federal bankruptcy court after a deal to sell itself collapsed.
The retailer said that Bulk Petroleum Co. of Wisconsin (Milwaukee) failed to arrange financing to complete its purchase. The sale was scheduled to close June 30, 2004.
Kiel’s stores are spread through Central and Southern Indiana, Southern Illinois and Kentucky. While most operate under the Tobacco Road banner, there are also Kiel Brothers Oil and Pick & Pump banners. Through franchise agreements, the stores use the gasoline brands of BP, Marathon, and various independent companies.
Kiel said it does not expect disruptions to the operations of its convenience stores or its 90 wholesale fuel dealer locations. Its 1350 employees are expected to report to work as usual. However, president Greg Pence has resigned, with cfo David Roll assuming the duties of president.
Kiel Bros., a family-owned business since its creation in 1941, had sales of $396 million in 2003. But it had struggled recently as fluctuating gasoline prices squeezed profits at its pumps and higher cigarette taxes did the same inside its stores. Profit margins hit a 17-year low in 2002, at 9.1 percent, according to the National Association of Convenience Stores.
As part of the filing, Kiel Bros. is seeking court approval for a $23.8 million credit facility from National City Bank. Debtor-in-possession financing would be used to pay employees and fund continued operations and working capital needs, a company statement said.