It is a sad fucking day yall,
Details are emerging through legal documents filed Tuesday on a complex pre-merger agreement between Flying J Inc. and Pilot Travel Centers in which Pilot would buy Flying J’s 250 travel centers, corporate headquarters and many other assets and Flying J would be become a minor shareholder in Pilot.
Flying J Inc., which has been in Chapter 11 bankruptcy protection since December 22, announced the agreement with Pilot Travel Centers Tuesday, with officials of both companies saying the move will lift Flying J out of bankruptcy and help both companies operate more effectively.
Particulars of the arrangement were revealed as Fying J filed a motion Tuesday in U.S. Bankruptcy Court in Delaware, where it is incorporated, seeking court approval of its deal with Pilot. Included in the filing was a letter of intent regarding assets Flying J is offering Pilot. Some portions of the letter were filed under seal.
Flying J entered bankruptcy after a sharp drop in oil prices and disruption of credit markets left it with a severe short-term liquidity problem. The company faces an Aug. 4 deadline to post collateral that replaces $22 million in surety bonds terminating on that date that guarantee Flying J’s operation. As of July 10, Flying J had $28.5 million cash on hand.
“The Debtors now face the termination of a majority of their bonds in a matter of weeks,” Flying J said in the motion filed Tuesday.
This threatened the company’s ability to continue its restructuring and, according to the filing, was a key impetus for the agreement with Pilot Travel Centers.
As outlined in the filings, Pilot Travel Centers would pay between $300 and $500 million plus an equity stake in Pilot to buy certain Flying J assets during a period in which Pilot would have exclusive rights to do so. These assets would include all 270 Flying J travel centers, its trucking operations, corporate headquarters in Ogden, Utah, including the building and operations, some properties adjacent to travel centers and other business operations.
Flying J’s corporate headquarters would move from Odgen to Knoxville, where Pilot is headquartered. According to the filing, Flying J Inc. business operations are valued at $1.189 billion and the value of Pilot Travel Centers is listed at $3.291 billion.
Flying J has other operations that would be excluded from the purchase, including its refining operations, oil and gas operations; credit card, banking and insurance businesses; pipeline operations; aircraft and aircraft-related assets and real estate.
Also as part of the agreement, Pilot Travel Centers will provide Flying J with $100 million in “post petition” financing to help cover its operating expenses until the two companies can merge. This would be provided as a $55 million revolving line of credit and $45 million in performance, surety or similar bonds.
Once the merger transaction is concluded, Flying J would be allowed to enter into stockholder agreements with Pilot, and would have minority shareholder and other rights. It also would have one year to purchase up to $200 million in additional equity in Pilot Travel Centers.
Flying J is asking Bankruptcy Court to let it submit information in its letter of intent under seal, citing it proprietary importance. Included in the information sought to be sealed is the resolution of a 2006 lawsuit between Flying J and Pilot Travel Centers.
Flying J filed the lawsuit in U.S. District Court in Salt Lake City against Pilot Travel Centers and TravelCenters of America, accusing them of boycotting Flying J Fuel cards under pressure from Condata Corp., which the lawsuit alleged controls 70 percent of the trucker fuel card market. In its response to the lawsuit, Pilot Travel Centers denied it was part of any such group boycott.
“As part of the sale transaction contemplated by the Letter of Intent, Flying J and Pilot have entered into an agreement with respect to the District Court Action,” Flying J said in its Tuesday bankruptcy filing. It asked the court to keep details of that agreement confidential.
Flying J is a major distributor of diesel fuel and operates 270 travel centers in 41 states and six Canadian provinces.
Pilot Travel Centers operates more than 300 travel centers in 41 states, plus a Canada travel center, and employs 13,000 around the country, with each travel center averaging $15 million in revenue per year. Headquartered in Knoxville, Pilot Travel Centers is a partnership between Pilot Corp., which is wholly owned by the Haslam family, and by Propeller Corp., which is owned by funds advised by CVC Capital Partners, a leading global private equity firm.
Pilot Corp. and the Haslam family, which includes founder Jim Haslam and his sons, Pilot Travel Centers CEO Jimmy Haslam and Knoxville Mayor Bill Haslam, have owned 52.5 percent of Pilot Travel Centers since buying out Marathon Oil Co.’s 50 percent interest last year for $700 million.
Propellar Corp., a wholly owned subsidiary of CVC Captial Partners funds, owns the minority stake in Pilot.
Pilot Travel Centers’ annual revenues totaled $16 billion in 2008.
Flying J has 15,000 employees nationwide and had sales exceeding $18 billion in 2008, placing it among the top 20 on Forbe’s magazine’s list of the 500 Largest Private Companies In America.
The only thing good I can see coming out of this situation is now flying j’s coffee won’t taste like what their parking lot smells like! I certainly fucking hope Pilot don’t fuck up and take out all the restuarants. If you think there are a lot of fat ass truckers out there now wait till there is nothing but Mc’D's and Arby’s at every truck stop.
It will be pilots version of a eutopia of large motherfuckers with out a salad to be found across the land. Looks like this big boy might need to start cooking in his own truck. Ah fuck it, time to get back up to the buffet here at the Petro before this fat bitch infront of me with 3 butt cheeks takes the last of the ham. Good day all!
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