Teekay Tankers Announces Asset Sales and New Debt Facility
January 28 2020 - 04:02PM
Teekay Tankers Ltd. (Teekay Tankers or the Company)
(NYSE:TNK) today announced the following updates since its Investor
Day in November 2019:
Sale of Non-U.S. Ship-to-Ship Transfer
Business
The Company has reached an agreement with Hili
Ventures to sell a portion of its oil and gas ship-to-ship transfer
support services business, which also provides gas terminal
management and gas consulting services, for approximately $26
million. The sale is expected to close late in the first quarter of
2020 or early in the second quarter of 2020.
Teekay Tankers will retain its entire
Full-Service Lightering business that operates in the U.S. Gulf,
which provides ship-to-ship oil transfers for both U.S. crude
imports and exports. In addition, the Company will continue to
operate oil ship-to-ship transfer support services in North America
and the Caribbean, a business that has synergies with its core
Full-Service Lightering business.
Vessel Sales
The Company has agreed to sell three 2003-built
Suezmax tankers in separate transactions for combined sale proceeds
of approximately $57 million. The first vessel was delivered to the
buyer in December 2019 and the remaining two vessels are expected
to be delivered during February 2020. The proceeds from the vessel
sales are expected to be used to reduce debt, including
approximately $30 million of debt directly secured by these three
vessels.
New Debt Facility
The Company has closed a new five-year, $533
million revolving credit facility to refinance 31 vessels. The size
of the new debt facility was reduced since announcing the term
sheet signing in November 2019 as a result of excluding five
vessels from the new facility, including the three vessel sales
noted above and a potential for further opportunistic vessel sales.
The proceeds from the new debt facility will be used to repay
approximately $455 million of the Company’s existing debt. The new
debt facility has substantially similar terms and extends balloon
maturities from 2020/2021 until the end of 2024.
Including the agreed asset sales and the new
debt facility, the Company’s liquidity is expected to increase by
approximately $73 million.
“We are excited to announce these opportunistic
asset sales for combined proceeds of approximately $83 million,
which is consistent with our strategy presented at our November
2019 Investor Day and accelerates our planned balance sheet
delevering efforts,” commented Kevin Mackay, Teekay Tankers’
President and CEO. “The sale of a portion of our ship-to-ship
transfer business also allows us to focus and simplify our core
business of crude oil and clean product shipping. Importantly, by
retaining our core Full-Service Lightering business in the U.S.
Gulf, we will continue to benefit from U.S. import and growing
export volumes, which provides synergies with our existing Aframax
tanker fleet.”
“We are also grateful for the continued strong
support we receive from our bank group, as represented by our new
$533 million debt facility, which was approximately two times
oversubscribed, and provides the Company with increased financial
flexibility.”
About Teekay Tankers
Teekay Tankers currently owns a fleet of 55
double-hull tankers (including 29 Suezmax tankers, 17 Aframax
tankers and nine LR2 product tankers), has six time-chartered-in
tankers, and has interests in five ship-to-ship support vessels.
Teekay Tankers also owns a Very Large Crude Carrier (VLCC) through
a 50 percent-owned joint venture. Teekay Tankers’ vessels are
typically employed through a mix of short- or medium-term
fixed-rate time charter contracts and spot tanker market trading.
In addition, Teekay Tankers owns a ship-to-ship transfer business.
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”.
For Investor Relations
enquiries contact:
Ryan HamiltonTel: +1 (604)
609-2963Website: www.teekay.com
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: the expected
timing of vessel sale deliveries, the timing and certainty of
closing the sale of a portion of the Company’s ship-to-ship
transfer business; the Company’s ability to continue benefitting
from U.S. oil imports and growing U.S. oil exports; the impact of
asset sales on the Company’s liquidity and financial leverage; and
the impact of the new debt facility on the Company’s financial
flexibility. 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: potential delays in
vessel sale deliveries and closing the sale of a portion of the
Company’s ship-to-ship transfer business; failure to close the sale
of the Company’s ship-to-ship transfer business or vessel sales;
changes in U.S. oil import or export volumes; and other factors
discussed in Teekay Tankers’ filings from time to time with the
United States Securities and Exchange Commission, including its
Annual Report on Form 20-F for the fiscal year ended December 31,
2018. The Company 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 Company’s
expectations with respect thereto or any change in events,
conditions or circumstances on which any such statement is
based.
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