Flying J Inc. and Pilot Travel Centers LLC plan to merge, the companies announced July 14, in a preliminary agreement. The plan provides a framework for Flying J’s core travel plaza business to emerge from Chapter 11 bankruptcy protection, according to a statement from both companies.
Under terms of the letter of intent filed with the U.S. bankruptcy court in Delaware, the value indicated would allow all Flying J creditor obligations to be paid in full. Knoxville, Tenn.-based Pilot has also agreed to provide $100 million in debtor-in-possession financing for Flying J’s operations, subject to court approval and various conditions.
“After a careful and exhaustive review of the alternatives available, we have concluded that a merger with Pilot represents the best possible outcome for Flying J, our creditors, our customers and our employees,” said Crystal Call Maggelet, Flying J chair. “Over the next few months, we will negotiate definitive agreements to merge our companies.”
Jimmy Haslam, Pilot CEO, said, “We believe that by combining Flying J and Pilot we will better serve our customers by more efficiently providing them with the products and services they need.”
The preliminary merger agreement with Pilot covers only Flying J’s travel plaza business. It excludes Longhorn Pipeline, Big West Oil, Flying J Oil & Gas, Haycock Petroleum and Transportation Alliance Bank. Flying J is considering business alternatives for each of these other companies, according to spokesman Peter Hill, of Kekst and Co.
Ogden, Utah-based Flying J filed for Chapter 11 protection Dec. 22 after a sharp drop in oil prices and disruption in the credit markets damaged the company’s cash position, Hill said.
