Teekay Tankers and Teekay Corporation Announce the Creation of a New Tanker Company
January 21 2014 - 8:30AM
Marketwired
Teekay Tankers and Teekay Corporation Announce the Creation of a
New Tanker Company
HAMILTON, BERMUDA--(Marketwired - Jan 21, 2014) - Teekay Tankers
Ltd. (Teekay Tankers) (NYSE:TNK) and Teekay Corporation
(Teekay) (NYSE:TK) today jointly announced the creation of
Tanker Investments Ltd. (TIL), which will seek to
opportunistically acquire, operate and sell modern secondhand
tankers to benefit from an expected recovery in the current
cyclical low of the tanker market. TIL has completed a $250 million
private equity offering in which Teekay Tankers and Teekay have
co-invested $25 million each for a combined 20 percent ownership
interest in the new company. The balance of the privately placed
TIL shares, which will trade on the Norwegian over-the-counter
market, have been purchased by a group of institutional investors
primarily based in the United States, Norway and United
Kingdom.
Transaction
Summary
- A portion of the net proceeds from the private equity offering
will be used to acquire four 2009 and 2010-built Aframax crude oil
tankers for an aggregate purchase price of approximately $116
million.
- TIL will also acquire four 2009-built Suezmax crude oil tankers
from Teekay for an aggregate purchase price of approximately $163
million, which TIL will pay for by assuming an equal amount of
indebtedness already secured by those vessels.
- TIL intends to use the remaining net proceeds from the private
equity offering to acquire additional tankers in the near future
and for general corporate purposes.
- In addition to the private equity offering and related
transactions, the Teekay and Teekay Tankers' Boards of Directors
have agreed in principle to the sale to Teekay Tankers of Teekay's
conventional tanker commercial and technical management operations
(Teekay Operations), including direct ownership in three
commercially managed tanker pools, which currently generates fees
from commercially managing a fleet of 82 vessels and technically
managing a fleet of 49 vessels.
- The TIL fleet will be managed by Teekay Operations. Upon
completion of the sale of Teekay Operations, the corresponding fees
associated with the management of TIL's vessels will be earned by
Teekay Tankers.
- Teekay and Teekay Tankers together will receive warrants to
acquire up to an additional 1.5 million shares of TIL's common
stock, linked to TIL's future share price performance.
The TIL private equity offering is expected to close on Friday,
January 24, 2014 and TIL's acquisition of the initial eight tankers
is expected to be completed in the first half of 2014. TIL intends
to undertake a public listing of its common stock on the Oslo Stock
Exchange in the first quarter of 2014.
"Our investment in TIL provides a new avenue for Teekay Tankers'
shareholders to benefit from a tanker market recovery," commented
Bruce Chan, Teekay Tankers' Chief Executive Officer. "This
transaction complements our existing strategy of owning and
in-chartering conventional tankers. In addition, our planned
acquisition of Teekay Operations represents the final step in
Teekay Tankers' evolution into a full-service conventional tanker
platform, which we believe will allow us to better serve our
customers and generate greater value for Teekay Tankers."
Peter Evensen, Teekay Corporation's President and Chief
Executive Officer commented, "With the sale of our last four owned
conventional tankers to TIL, Teekay Corporation is one step closer
to achieving its strategy of becoming an asset-light company
primarily focused on increasing the value of its daughter
entities."
DNB Markets acted as exclusive financial advisor to Teekay
Tankers and Teekay on the formation of TIL. DNB Markets and Pareto
Securities acted as joint bookrunners on the private equity
offering for TIL.
About Teekay Tankers Ltd.
Teekay Tankers currently owns a fleet of 27 double-hull vessels,
including 11 Aframax tankers, 10 Suezmax tankers, three Long Range
2 (LR2) product tankers, three Medium-Range (MR)
product tankers and has one time-chartered in Aframax tanker, which
vessels an affiliate of Teekay Corporation (NYSE:TK) manages
through a mix of short- or medium-term fixed-rate time-charter
contracts and spot tanker market trading. The Company also owns a
Very Large Crude Carrier (VLCC) through a 50 percent-owned
joint venture. Teekay Tankers was formed in December 2007 by Teekay
Corporation as part of its strategy to expand its conventional oil
tanker business.
Teekay Tankers' common stock trades on the New York Stock
Exchange under the symbol "TNK".
About Teekay Corporation
Teekay Corporation is an operational leader and project
developer in the marine midstream space. Through its general
partnership interests in two master limited partnerships, Teekay
LNG Partners L.P. (NYSE:TGP) and Teekay Offshore Partners L.P.
(NYSE:TOO), its controlling ownership of Teekay Tankers Ltd.
(NYSE:TNK), and its fleet of directly-owned vessels, Teekay is
responsible for managing and operating consolidated assets of over
$11 billion, comprised of approximately 170 liquefied gas,
offshore, and conventional tanker assets. With offices in 15
countries and approximately 6,400 seagoing and shore-based
employees, Teekay provides a comprehensive set of marine services
to the world's leading oil and gas companies, and its reputation
for safety, quality and innovation has earned it a position with
its customers as The Marine Midstream Company.
Teekay's common stock is listed on the New York Stock Exchange
where it trades under the symbol "TK".
About Tanker Investments Ltd.
Tanker Investments Ltd. is a conventional tanker company that
has entered into agreements to acquire four 2009-built Suezmax
crude oil tankers and four 2009 and 2010-built Aframax crude oil
tankers that are expected to be acquired during the first half of
2014. TIL was formed in January 2014 by Teekay Tankers Ltd. and
Teekay Corporation to opportunistically acquire, operate and sell
modern secondhand tankers to benefit from cyclical fluctuations in
the tanker market.
TIL's common stock will trade on the Norwegian over-the-counter
market.
FORWARD LOOKING
STATEMENTS
This release contains forward-looking statements (as defined in
Section 21E of the Securities Exchange Act of 1934, as amended)
which reflect management's current views with respect to certain
future events and performance, including statements regarding:
closing of the TIL private equity offering; the expected recovery
in the tanker market; the timing and certainty of completing TIL's
pending acquisition of four 2009 and 2010-built Aframax crude oil
tankers and four 2009-built Suezmax crude oil tankers; execution by
TIL of its strategy of acquiring these and additional vessels,
operating them and benefiting from a recovery in the tanker market
by selling them at a profit; the listing of TIL's common stock on
the Norwegian over-the-counter market and the Oslo Stock Exchange;
the acquisition by Teekay Tankers of Teekay's conventional tanker
commercial and technical management operations; and Teekay Tankers'
ability to generate greater value from its conventional tanker
business. The following factors are among those that could cause
actual results to differ materially from the forward-looking
statements, which involve risks and uncertainties, and that should
be considered in evaluating any such statement: failure by
investors in the TIL private equity offering to fulfill their
commitments; conditions in the tanker market; failure by the owner
of four Aframax crude oil tankers to fulfill its obligations to
sell the vessels to TIL; failure by Teekay to obtain the necessary
third party consent for TIL's purchase of the four Suezmax crude
oil tankers; the inability of TIL to source, secure and complete
future secondhand tanker vessel acquisitions at attractive prices,
if at all; the inability of TIL to sell the tanker assets when the
tanker market recovers, if at all; failure by Teekay or Teekay
Tankers to complete Teekay's sale of its conventional tanker
commercial and technical management operations to Teekay Tankers;
requirements of the Norwegian over-the-counter market and the Oslo
Stock Exchange for the listing of TIL's common stock; changes in
production of or demand for oil, either generally or in particular
regions; greater or less than anticipated levels of tanker
newbuilding orders or greater or less than anticipated rates of
tanker scrapping; changes in trading patterns significantly
affecting overall vessel tonnage requirements; and other factors
discussed in Teekay Tankers' and Teekay's filings from time to time
with the SEC, including its Reports on Form 20-F for the fiscal
year ended December 31, 2012. Teekay Tankers and Teekay expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in their expectations with respect
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Teekay CorporationRyan HamiltonInvestor Relations enquiries+1
(604) 844-6654www.teekay.com
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