WESTLAKE, Ohio — At its 2019 annual meeting of shareholders, TravelCenters of America LLC (TA) announced that its board of directors has unanimously approved a plan to convert from a Delaware limited liability company, or LLC, to a Maryland corporation.
“Today, we announce TA’s intent to convert from an LLC to a corporation,” said Andy Rebholz, CEO and managing director of TravelCenters of America. “The TA board of directors believes this conversion will make it easier for a broader group of investors to own TA stock, including by enabling possible index eligibility for TA.”
This conversion requires certain regulatory approvals, and the company said it expects to complete the process before the end of 2019.
The move is among several intended to refocus the company on its core business and to reposition it financially.
In January, TravelCenters of America entered into an agreement with its principal landlord, Newton, Mass.-based Hospitality Properties Trust (HPT), to acquire 20 properties it leased from HPT for $308.2 million. It has also agreed to amend other leases with HPT.
Rebholz said he expected the agreements to reduce rental expense and improve operating and financial leverage; increase potential net operating cash flows and annual free cash flow; provide greater financial flexibility; increase the number of unencumbered travel centers TA owns from 32 to 52 and address uncertainty surrounding the deferred rent obligation while providing for a reduced amount to be paid.
In December 2018, TravelCenters of America completed the sale of 225 Minit Mart c-stores to Blackburn, U.K.-based EG Group. In April 2018, EG Group acquired the 762-site U.S. c-store business from The Kroger Co., Cincinnati.
“With the sale of the stand-alone convenience-store business concluded last month and the proceeds from that sale now committed to reduce TA’s leverage with the transaction announced today, TA can begin 2019 focused on our core travel-center business and thoughtfully pursuing growth opportunities that include network expansion and TA’s industry-leading truck service programs, while continuing to manage capital expenditures,” Rebholz said at the time.
Meanwhile, TravelCenters of America has reported a net loss of $12.7 million for its first-quarter 2019, compared to a $10.1 million net loss for the same period last year. Fuel sales volume and non-fuel revenues in total improved by 3% and 4%, respectively, and by 2% and 2.7%, respectively, on same site basis. Within non-fuel revenues, store and retail services revenue grew 5.9%, Rebholz said on the company’s recent earnings call.
- TravelCenters of America is No. 28 in the Top 40 update to CSP’s 2018 Top 202 ranking of c-store and truckstop chains by number of retail outlets.
Westlake, Ohio-basedTravelCenters of America’s nationwide business includes travel centers in 43 U.S. states and in Canada and stand-alone restaurants in 14 states. Its travel centers operate under the TravelCenters of America, TA, TA Express, Petro Stopping Centers and Petro brand names and offer diesel and gasoline fueling, restaurants, truck repair services, travel/convenience stores and other services designed to provide attractive and efficient travel experiences to professional drivers and other motorists. TA's stand-alone restaurants operate principally under the Quaker Steak & Lube brand name.