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Petro Holdings GP Corp. commences tender offer in Petro Stopping Centers transaction.

NEW YORK--(BUSINESS WIRE)--December 20, 1996--Chartwell Investments Inc. announced today that Petro Holdings GP Corp., an affiliate of Chartwell, has commenced a tender offer and consent solicitation with respect to $100 million principal amount of Petro Stopping Centers, L.P. 12+% Senior Notes due 2002 as part of the previously announced recapitalization of Petro Stopping Centers, L.P. The tender price for the Notes is $1,025 per $1,000 principal amount of Notes, plus accrued but unpaid interest to the closing. In addition, Petro Holdings GP Corp. if offering to purchase Petro's 100,000 Debt Warrants at a price of $56.76 per Debt Warrant, which is the equivalent of $1,025 per $1,000 principal amount of Notes into which the Debt Warrants would be exchangeable. As part of the tender offer, Petro Holdings GP Corp. is seeking consents to proposed amendments to the Indenture governing the Notes. The tender offer is conditioned upon, among other things, obtaining the approval of the proposed amendments to the Indenture and the tendering of at least 75% of the aggregate principal amount of the Notes outstanding. The tender offer will expire at 5:00 p.m. on January 17, 1997 unless extended. No separate consent fees are to be paid.

Petro Holdings GP Corp. has entered into agreements with the holders of over 75% of the $100 million principal amount of the Notes pursuant to which these holders have agreed to tender their Notes and vote in favor of the proposed amendments. As a result of the tendering of these Notes, the minimum condition will be met and the amendments to the indenture will be approved.

The Transaction

On October 24, Mobil Corporation and Chartwell Investments Inc. announced that their respective affiliates agreed to purchase the majority stake in Petro Stopping Centers, L.P., which operates the premier nationwide network of 42 full- service truck stop/travel plazas. Terms of the agreement include an investment of $20.7 million by affiliates of Chartwell and $15 million by an affiliate of Mobil to acquire the interests of The Fremont Partners for $28.5 million subject to adjustment), and to invest $7.2 million in the Company.

Upon completion of the transactions, the common partnership interests of the Company will be owned by Chartwell affiliates (approximately 52%), founder and Chief Executive Officer Jack Cardwell and his affiliates (approximately 41%) and an affiliate of Mobil (approximately 7.5%) and the preferred partnership interests will be owned by a Mobil affiliate ($12.0 million) and the Cardwell Group ($7.6 million).

The Mobil Alliance

Mobile and Petro will, at the closing, enter into a 10-year supply agreement under which Mobil will supply the Company's diesel fuel requirements. Diesel fuel sold at all truck stops operated by Petro will be branded "Mobil", and Petro will enter into 10-year supply agreements under which Mobil will supply lubricants and gasoline to Petro. The Company's Petro:Lube operations will feature Mobil Delvac lubricants and Petro will initially brand 11 of its gasoline fueling facilities at its truck stop "Mobil."

This strategic partnership between Petro and Mobil will combine the nation's premier truck stop operator with the strong Mobil brand name, and is expected to strengthen the company's product and service offerings to fleets to build a competitive advantage in meeting the needs of the increasingly sophisticated fleet customer. The company and Mobil will also enter into a Memorandum of Understanding with respect to the joint development of new projects, and as an additional component of the alliance, Mobil will provide marketing and other services, including access to Mobil personnel and resources.

Jack Cardwell, the founder and Chief Executive Officer of the Company, will resume an active role in the company's daily activities with the additional roles of President and Chairman.

The transactions are expected to close in early 1997.

Questions regarding the tender offer or consent solicitation should be directed to the Dealer/Manager: CBIC Wood Gundy Securities Corp. at (212) 885-4400.

CONTACT: Hill and Knowlton, Inc.

Geoffrey Smith

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Publication:Business Wire
Date:Dec 20, 1996
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