Energy Transfer Partners LP Message Board
-
MLP status, gas stations
Read an article that said ETP must sell the stations because they would not fit MLP legal definition and would threaten ETP tax structure. Cannot remember, find which article it was. Makes sense to me. Anyone knowing more would be appreciated. The 4900 stations could already have a buyer, ETP just has to close the deal before announcing it?
Sentiment: Hold
-
I have to believe that management is aware of any problems and is prepared to handle them. I hardly believe management would do something to lose MLP status.
- 1 Reply to mako24nako
-
This issue is a red herring.
As far as I know there is no legal definition of what can be held in an MLP.
This issue is whether or not gas stations are APPROPRIATE from a business perspective (i.e. the need to maintain distributions) is the main question.
The UBTI issue is significant for REITs, which must have primarily have rental revenue.
aa
-
They could lease out the stations to an operator or several operators as rental income is allowed in an MLP. That may allow them to secure a source of income while they devise a strategy.
-
Ummm, GLP is an MLP with TONS of gas stations. Not sure why it wouldn't work if they're able to do it. Sounds odd.
- 1 Reply to derivative5150
-
While the fuel from the stations is considered part of the core business, merchandise and food sold is not. Could increase the amount of UBTI if they decide to keep them.
Did GLP generate any UBTI last year?
-