HAMILTON, BERMUDA – (MARKET WIRE) – 04/16/12 – Teekay Corporation (NYSE:TK) (Teekayor the Company) announced today that it has reached an agreement to sell to its publicly-traded subsidiary, Teekay Tankers Ltd. (NYSE:TNK) (Teekay Tankers), 13 of the Company’s 17 directly-owned conventional tankers and related time-charter contracts, debt facilities and other assets and rights, for an aggregate purchase price of approximately $455 million.Transaction Summary
– Teekay to sell to Teekay Tankers a fleet of seven crude oil tankers and six product tankers, along with related time-charter out contracts, debt facilities and an interest rate swap, for an aggregate price of approximately $455 million. – As partial consideration, Teekay will receive $25 million in new Teekay Tankers Class A shares at a price of $5.60 per share. – Nine of the 13 vessels to be sold currently operate under fixed-rate time-charters. – The sale includes the assumption by Teekay Tankers of outstanding debt of approximately $180 million in term loans and approximately $290 million in available revolving credit facilities, of which approximately $40 million will be undrawn. – Teekay will grant Teekay Tankers a right of first refusal on any conventional tanker opportunities developed by Teekay for a period of three years from the closing date. – Additional details of the transaction will be provided by Teekay Tankers management during a conference call scheduled for Tuesday, April 17, 2012 at 9 am (ET). The table below summarizes the vessels to be sold as well as the time-charter out contract details:
Year Vessel Built Class Employment Charter Expiry Charter Rate
Crude Oil Tankers
- Zenith Spirit 2009 Suezmax Spot n/a n/a
- Pinnacle Spirit 2008 Suezmax Time-charter Oct 30, 2014 $21,000
- Summit Spirit 2008 Suezmax Time-charter Oct 30, 2014 $21,000
- Godavari Spirit 2004 Suezmax Time-charter Dec 31, 2012 $21,000
- Australian Spirit 2004 Aframax Time-charter Jan 30, 2016 $21,000
- Axel Spirit 2004 Aframax Time-charter Dec 29, 2016 $19,500
- Americas Spirit 2003 Aframax Time-charter Sep 30, 2015 $21,000
Product Tankers
- Galway Spirit 2007 LR2 Spot n/a n/a
- Limerick Spirit 2007 LR2 Spot n/a n/a
- Donegal Spirit 2006 LR2 Spot n/a n/a
- Hugli Spirit 2005 MR Time-charter Mar 1, 2015 $30,600(i)
- Teesta Spirit 2004 MR Time-charter Mar 25, 2013 $21,500
- Mahanadi Spirit 2000 MR Time-charter May 12, 2013 $21,500
(i) Charter rate covers incremental Australian crewing expenses of approximately $14,000 per day above international crewing costs. As part of the transaction, Teekay and Teekay Tankers will enter into a non-competition agreement, which will provide Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities developed by Teekay for a period of three years from the closing date of this transaction.As partial consideration for the sale, Teekay will receive $25 million of newly issued shares of Teekay Tankers Class A common stock, and the remaining amount will be settled through a combination of cash payments to Teekay and the assumption by Teekay Tankers of existing debt secured by the acquired vessels. The number of Teekay Tankers Class A common shares to be issued to Teekay was determined based on an aggregate value of $25 million and a price per share of $5.60, which represents the trailing 20-day volume-weighted average price for the period immediately preceding today’s announcement of the transaction (inclusive of April 16, 2012). As a result of this share issuance, Teekay’s economic interest in Teekay Tankers will increase from approximately 20 percent to approximately 25 percent and its voting interest as a result of its combined ownership of Class A and Class B shares will increase from approximately 51 percent to approximately 53 percent.
The transaction has been approved by Teekay Corporation’s Board of Directors. A Conflicts Committee, comprised of the independent members of Teekay Tankers’ Board of Directors, negotiated the transaction on behalf of Teekay Tankers and retained DNB Markets as its financial advisor, which also provided a fairness opinion to the Teekay Tankers Conflicts Committee in connection with this transaction. The transaction, which is subject to final documentation, receiving relevant third party consents, and other customary closing conditions, is expected to be completed in the second quarter of 2012