TravelCenters of America (NASDAQ: TA) pledged practically all of its assets to secure a $200 million loan to pay for CEO Jonathan Pertchik’s makeover of the business.
It is TA’s second major fundraising effort this year. It sold 6.1 million new shares in the company at $14.61 a share in July after cutting the price by about a third from the original asking price. TA raised about $80.1 million from the sale.
Buyers of those shares have done well. TA shares closed Monday up 3% at $32.98.
The seven-year loan has a 7% interest rate payable in quarterly payments equal to 1% of the principal annually. The balance would be due on the maturity date. TA can prepay the loan after two years at par.
Assets pledged
The loan is secured by a pledge of all the equity interests of “substantially all of TA’s wholly owned subsidiaries. Most other TA assets are on the line as well, according to a company press release issued after the markets closed Monday.
TA will use the proceeds for general business purposes. That includes funding of deferred capital expenditures, updates to key IT infrastructure, and growth initiatives in Pertchik’s transformation plan. Pertchik is a veteran turnaround expert hired as CEO a year ago this week.
“By closing this new loan, we have further strengthened our balance sheet and given ourselves increased flexibility in a dynamic capital environment,” he said.
Pertchik’s restructuring
Pertchik’s hired a new chief financial officer and executive vice presidents to oversee restaurants, gaming and convenience stores, corporate development, and information technology. The sweeping reorganization in May included cutting 130 corporate positions.
TA is pursuing franchisees to take over existing truck stops to grow the TA, Petro Stopping Centers and TA Express travel center brands. TA is focused on converting good-quality, well-located independent truck stops to the TA model, Pertchik told FreightWaves in a March interview.
Taking care with loan money
“As we look ahead to 2021, we have the people, the plan, the processes and now the liquidity to advance our transformation playbook,” he said in the press release.
TA is being careful with the loan money, Pertchik said. The travel center network operator has 270 locations in 44 states and Canada. It is managing through the pandemic with little certainty of what lies ahead.
TA has closed, reopened and closed dine-in restaurants in many states because of the pandemic. It laid off more than 3,000 employees in March. Business conditions allowed some to return.
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Veteran turnaround expert takes on TravelCenters of America makeover
TravelCenters lays off more than 3,000 as full-service restaurants idled
Brain Bergland
I’ve been a Driver for 30 Years ..and for the Last 15 of those Yesrs, I’ve seen the Truckstop Industry go from Catering to the Truck Driver to Appealing to the Traveling Public…Us Truckers have lost our Place of Brother Hood..we can no longer gather at a good Restaurant and have a Hot Meal..Because the Industry has Replaced Restaurants with Fast Food Joints…I personally have no use for TA Or Petro.i only stop for Fuel or a Shower..Its Really Furstraiting that Truckstops have turned their Backs on the Truck Driver..we are Forced to eat Overpriced Fast Food ..on a Daily Basis….im sick of it ..and im Sure I Speak for 1000s of Fellow Drivers..it would be Greatly Appreciated if You guys would Invest in bringing back the In House Restaurant…
George R Boyd
Your prices are extremely high!!! Especially to eat a Marginal meal
In your restaurants. Insane prices and mark ups on Everything!!
Thank God for Walmart
Nelsiena
TA & Petro have no interest in accommodating the professional driver. Their parking fees is outrageous. 20.00 to park a truck at many of their locations and 1/2 to 2/3 of the parking areas are reserved spaces.
It is hard enough for tbe professional drivers to find parking let alone have to pay for it.
The price of goods is outlandish. You can go to a Love’s ir another truck stop chain and purchase the same item for 1/3 of the cost.
The TA’s are in dire need of a face-lift. They appear as old and rundown. The parking lots are Crater haven at most locations.
The new management has their work cut out for them…good luck.
Kevin Coble
If you stop trying to screw your customer base, you wouldn’t need loans. Let’s see, your reserved parking is stupid high, you removed the cafes in many and replaced them with an overpriced fast food chicken joint.. Your shops and employees are a joke most of the time. You sign in for repairs and you can literally set and stare at an empty shop for eight or more hours sometimes before they call you in for said repairs. And I’m talking as an owner operator, not one that has to wait for approval from a company. I could go on and on, but you get the picture. 10 years ago I would have rated you probably a 5 out of ten, today a 2 tops, and that’s only because your shoes and restrooms are generally cleaner than most and the coffee is usually well stocked. You’ve done all this to yourselves.
David wilson
So there going to take over good truckstops and turn them into crappie ones they dont care about drivers otherwise they wouldn’t RIP them off glad I got local job so I dont have to put up with it good luck out there
Dennis gray
Hello I’ve been driving 38 years now .watching prices in the stores and restaurants prices just keep going up.i understand inflation .we cannot go anywhere else to search for better prices do to our big trucks. Please help us in someway.especially our new drivers coming on there paychecks are not much.i remember the days of free coffee .now in some places we have to pay to park where is this gonna end.we cannot afford you and you cannot afford loosing drivers.i spend approx 20 dollars every night in the restraints and that with tip 5.00 on a 15.00 meal .ok thats only a burger and fry. I can cut my tip down but I dont.15 bucks for a shower .when your CEO makes big money us drivers don’t want to hear about it.i know employees been working there for 25 years plus only making 12.35 a hour.when you sell coffee over 2 dollars a cup times that by what one bag of coffee grounds makes thats great profit can you pass a little more to your workers..thank-you Merry Xmas
Ashley
I work at a Petro and they have some good and bad plans, in my opinion, for our site. Our Iron Skillet, has been steadily losing money and is at risk for replacement by fast food joints. It’s sad because drivers won’t be able to just sit there and talk shop before, during, or after a meal. I enjoy hearing stories and I know they are glad to be able to be out of the truck and talking to and interacting with real people. They do have some good ideas for our Stopping Center. I look forward to the changes with hope. Drive safe everyone and I will see you at the store.
Larry Miner
Stop closing the sit down family type restaurants. Truck drivers can not live on fast food burgers and chicken. We like the salad bar and a real menu.