Teekay Offshore Partners to Acquire an Additional 25 Percent of Opco; Opco to Acquire Two Lightering Vessels
June 05 2008 - 9:30PM
Marketwired
HAMILTON, BERMUDA (NYSE: TOO) announced today that it has agreed
to acquire an additional 25 percent of Teekay Offshore Operating
L.P. (OPCO) from Teekay Corporation (Teekay) for a purchase price
of $205 million.
Upon the completion of the acquisition, Teekay Offshore will own
51 percent of OPCO, including all general partner interests, and
Teekay will own the remaining 49 percent of OPCO, which it may
choose to sell to the Partnership in the future.
The Partnership also announced today that OPCO has agreed to
acquire from Teekay two 2008-built Aframax lightering tankers,
specially designed to be used in ship-to-ship oil transfer
operations, for total cost of $106 million, including the
assumption of $90 million of existing debt relating to the vessels.
These tankers are currently employed on 10-year, fixed-rate,
bareboat charters to Teekay's 50 percent-owned joint venture
company, Skaugen PetroTrans (with options exercisable by the
charterer to extend up to an additional five years).
The Board of Directors of the Partnership's general partner and
its conflicts committee approved both transactions. The conflicts
committee retained outside legal and financial advisors to assist
it in evaluating the transactions. In approving the transactions,
the committee obtained the views of its financial advisor as to the
fairness of the purchase prices. The Partnership expects to finance
these transactions through a combination of existing cash balances,
borrowings under OPCO's revolving credit facilities and the
issuance of additional equity, potentially including an issuance of
equity to Teekay. Both transactions, which are subject to standard
closing conditions and financing, are expected to be completed
during June 2008.
"As a result of these acquisitions, management anticipates
recommending to the Board of Directors of the Partnership's general
partner an increase in the quarterly cash distribution rate in the
range of 12 to 15 percent over the current annualized distribution
of $1.60 per unit," stated Peter Evensen, Chief Executive Officer
of Teekay Offshore GP LLC, the Partnership's general partner. "High
oil prices continue to stimulate the offshore industry, and Teekay
Offshore is uniquely positioned to grow in this market. We will
strive to continue to make further accretive acquisitions."
About Teekay Offshore Partners L.P.
Teekay Offshore Partners L.P., a publicly-traded master limited
partnership formed by Teekay Corporation (NYSE: TK), is an
international provider of marine transportation and storage
services to the offshore oil industry. Teekay Offshore Partners
currently owns a 26 percent interest in and controls Teekay
Offshore Operating L.P., a Marshall Islands limited partnership
with a fleet of 36 shuttle tankers (including 11 chartered-in
vessels), four floating storage and offtake units (FSO), and nine
conventional crude oil Aframax tankers. In addition, Teekay
Offshore Partners L.P. has direct ownership interests in two
shuttle tankers and one FSO. Teekay Offshore Partners also has
rights to participate in certain floating production, storage and
offloading (FPSO) opportunities.
Teekay Offshore Partners' common units trade on the New York
Stock Exchange under the symbol "TOO".
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements within the
meaning of U.S. federal securities laws, which reflect management's
current views with respect to certain future events and
performance, including statements regarding: the anticipated
increase in the Partnership's cash distribution rate; the closing
and financing of the Partnership's acquisition of 25 percent of
OPCO and OPCO's acquisition of the two Aframax tankers; the
potential for Teekay to offer to Teekay Offshore additional limited
partner interests in OPCO; and Teekay Offshore's growth and making
further accretive acquisitions. 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: the
failure to generate sufficient cash for distribution; unforeseen
operational difficulties, such as unanticipated drydockings or
accidents; changes in production of offshore oil, either generally
or in particular regions; changes in trading patterns significantly
affecting overall vessel tonnage requirements; changes in
applicable industry laws and regulations; the potential for early
termination of long-term contracts and inability of the Partnership
or OPCO to renew or replace long-term contracts; the failure of
Teekay to offer additional interests in OPCO to Teekay Offshore;
required approvals by the board of directors of Teekay Offshore's
general partner of any cash distribution by the Partnership,
including any increase in the quarterly rate of such distributions;
required approvals by the board of directors of Teekay and Teekay
Offshore's general partner, as well as the conflicts committee of
Teekay Offshore to acquire additional interests in OPCO; the
Partnership's ability to finance, and the cost of financing the
purchase of additional vessels and/or interests in OPCO; changes to
the amount or proportion of revenues, expenses, or debt service
costs denominated in foreign currencies; and other factors
discussed in Teekay Offshore's filings from time to time with the
SEC, including its Report on Form 20-F for the fiscal year ended
December 31, 2007 and its Report on Form 6-K for the quarter ended
March 31, 2008. The Partnership 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 the Partnership's expectations with respect thereto or any
change in events, conditions or circumstances on which any such
statement is based.
Contacts: Teekay Tankers Ltd. Dave Drummond Investor Relations
Enquiries (604) 609-6442 Teekay Tankers Ltd. Alana Duffy Media
Enquiries (604) 844-6605 Website: www.teekaytankers.com
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