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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
Commission file number 1-13020
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PETRO FINANCIAL CORPORATION
(Exact name of the registrant as specified in its charter)
Delaware 74-2699614
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6080 Surety Dr.
El Paso, Texas 79905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (915) 779-4711
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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PART 1. Financial Information
Item 1. Financial Statements
PETRO FINANCIAL CORPORATION
UNAUDITED BALANCE SHEETS
December 31, June 30,
1998 1999
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Assets
Current assets:
Cash $1,000 $1,000
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Total assets $1,000 $1,000
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Stockholder's Equity
Common stock, $.01 par value: authorized 10,000 shares:
issued and outstanding 2,500 shares $ 25 $ 25
Additional paid-in capital 975 975
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Total stockholder's equity $1,000 $1,000
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See accompanying notes to unaudited balance sheets
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PETRO FINANCIAL CORPORATION
NOTES TO UNAUDITED BALANCE SHEETS
1) Organization and Basis of Presentation
Petro Financial Corporation (the "Company") is a wholly owned subsidiary of
Petro Stopping Centers, L.P. ("PSC") and was incorporated in February 1994 for
the sole purpose of acting as a co-obligor with PSC for the issuance of 100,000
units consisting of $100,000,000 12.5% Senior Notes due 2002 (the "Notes") and
100,000 exchangeable Debt Warrants (the "Warrants"). The Notes and Warrants
were recorded on the financial statements of PSC. In January 1997, PSC and the
Company, as co-obligors, issued $135,000,000 10.5% Senior Notes due 2007 (the
"New Notes") and made a tender offer for all of, and repurchased approximately
94.0% of the Notes and approximately 100% of the Warrants. The remaining Notes
and the New Notes are recorded on the financial statements of PSC.
The Company has no employees and does not conduct any operations.
The accompanying balance sheets have been prepared in accordance with the
instructions to Form 10-Q and, therefore, certain financial information has been
condensed and certain footnote disclosures have been omitted. Such information
and disclosures are normally included in the financial statements prepared in
accordance with generally accepted accounting principles.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto in the Annual Report of Petro Financial
Corporation on Form 10-K for the year ended December 31, 1998 ("1998 Form 10-
K"). Capitalized terms used in this report and not defined here have the
meaning ascribed to such terms in the 1998 Form 10-K. In the opinion of
management of the Company, the accompanying financial statements contain all
adjustments necessary to present fairly the financial position of the Company at
December 31, 1998 and June 30, 1999.
2) Subsequent Events
On July 23, 1999, PSC, certain of its partners and Volvo Trucks North
America, Inc. ("Volvo") consummated a transaction (the "Recapitalization")
pursuant to which Petro Stopping Centers Holdings, L.P. ("Holdings") was formed,
and all of the present owners in PSC, other than Petro Holdings GP Corp., Petro
Holdings LP Corp., each of which are affiliates of Chartwell Investments, Inc.
(collectively, "Chartwell") and Kirschner Investments ("Kirschner"), a company
franchisee, became owners in Holdings. Petro Holdings Financial Corporation
("Financial Holdings") was formed for the purpose of serving as co-issuer of New
Senior Discount Notes (as defined below) and PSC and the Company, became
subsidiaries of Holdings. Petro Warrant Holdings Corporation ("Warrant
Holdings") was formed for the purpose of owning a common limited partnership
interest in Holdings and issuing the Warrants (see below). In addition, Volvo
Petro Holdings, L.L.C. ("Volvo Trucks"), an affiliate of Volvo, invested
$30,000,000 to acquire common limited partnership interests in Holdings while
Mobil Long Haul, Inc. ("Mobil"), an affiliate of Mobil Corporation, invested an
additional $5,000,000 in convertible preferred interests of Holdings. Holdings
purchased the common interest in PSC owned by affiliates of Chartwell for
aggregate consideration of approximately $69,800,000, which consisted of a
$55,000,000 cash payment and the issuance to Chartwell of approximately
$14,800,000 in accreted value of 15.0% New Senior Discount Notes (as defined
below) due 2008, without Warrants. Holdings also purchased the common interests
in PSC owned by Kirschner for cash consideration of $2,800,000. J. A. Cardwell,
Sr., James A. Cardwell, Jr., Petro Inc. (a corporation wholly owned by J. A.
Cardwell, Sr.) and JAJCO II, Inc. (a company owned by James A. Cardwell, Jr.)
(collectively, the "Cardwell Group") and Mobil maintained their capital
investments in Holdings.
As part of the Recapitalization, Holdings issued 82,707 Units each
consisting of $1,000 principal amount at stated maturity of Holdings of 15.0%
Senior Discount Notes Due 2008 and 82,707 exchangeable Warrant Holdings'
Warrants ("New Senior Discount Notes"). Upon an exchange event, the Warrants
will be exchanged, for no additional consideration, for 100% of the common stock
of Warrant Holdings, whose
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sole asset is currently 10.0% of the common limited partnership interests in
Holdings. Neither Warrant Holdings nor Financial Holdings will conduct any
business other than issuance of the Warrants and acting as the co-issuer of the
New Senior Discount Notes, respectively.
After giving effect to the Recapitalization, Holdings is the owner of
approximately 99.0% of the common interests of PSC. The common partnership
interests of Holdings are owned by the Cardwell Group (approximately 51.6%),
Volvo Trucks (approximately 28.7%), Mobil (approximately 9.7%) and Warrant
Holdings (approximately 10.0%) and the mandatorily redeemable preferred
partnership interests of Holdings are owned by Mobil ($17,000,000) and the
Cardwell Group ($7,600,000). The Cardwell Group owns both general and limited
partnership interests in Holdings, while Volvo, Mobil and Warrant Holdings own
only limited partnership interests.
PSC also amended its senior collateralized credit facility (the "Existing
Senior Credit Facility" and, as amended, the "New Senior Credit Facility") as
part of the Recapitalization. The New Senior Credit Facility consists of an
$85,000,000 revolving credit facility and a $40,000,000 Term Loan B. The
proceeds of the New Term Loan B were used to repay amounts due under the Term A
and B Loans and the Expansion Facility of the Existing Senior Credit Facility of
approximately $38,271,000, plus accrued interest. The New Senior Credit
Facility is collateralized by substantially all of the assets of PSC.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company is inactive and, accordingly, it has no operations and only
minimal assets.
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27-Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed no reports on Form 8-K during the quarter ended
June 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PETRO FINANCIAL CORPORATION
(Registrant)
Date: August 16, 1999 /s/ David A. Appleby
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David A. Appleby
Vice President of Finance
(Chief Accounting Officer)
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EXHIBIT INDEX
Exhibit No. Exhibit Description
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27* Financial Data Schedule
* Filed herewith.
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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000
<CURRENT-LIABILITIES> 0
<BONDS> 0<F1>
0
0
<COMMON> 25
<OTHER-SE> 975
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>NOT SEPARATELY IDENTIFIED IN THE CURRENT FINANCIAL STATEMENTS OR
ACCOMPANYING NOTES THERETO.
</FN>
</TABLE>
