It sounds like their debt was collateralized by their receivables and inventory, which they had to mark down by $100.00 per barrel - like one giant margin call. I'm sure their volumes have suffered as well.
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It sounds like their debt was collateralized by their receivables and inventory, which they had to mark down by $100.00 per barrel - like one giant margin call. I'm sure their volumes have suffered as well.
I wonder how other Gas and diesel stations are fairing. In todays credit climate, you got to believe just about all of them are screwed.
Gary,
I only have one C store, but I am doing great. Fortunately, I don't have any debt to service.
We make higher margins when prices at the rack are falling. The street prices always lag the rack prices; therefore, our margins are higher. Also, each load of gas we receive costs less so the margins widen.
When rack prices are rising the street prices never increase commensurately, so our margins are lower.
I think Tuga's explanation is a better accounting of what I see going on with most c store and truck stop operators. I have sat through several loan committee meetings where this was evidenced.