Teekay Corp. (TK) said it will sell 13 of its 17 directly owned conventional tankers to its subsidiary Teekay Tankers Ltd. (TNK) in a stock-and-debt deal valued at about $455 million, allowing Teekay to invest in new areas.
Teekay, which provides marine services to the petroleum industry, has posted mixed results in recent quarters. The company has been striving to reduce its exposure to a stubbornly sluggish spot market, which has been hurt by a glut of new tankers ordered in an earlier commodities boom continuing to enter the market.
Teekay will receive $25 million worth of new Teekay Tankers shares, priced at $5.60 a share. Teekay Tankers will assume Teekay debt of about $470 million. The deal is expected to close in the second quarter.
The sale comprises a fleet of seven crude oil tanker and six product tankers, along with related time-charter out contracts, debt facilities and interest rate swap.
Teekay Chief Executive Peter Evensen said the sale of nearly all of the company’s directly owned conventional tanker fleet will help Teekay reduce its borrowing burden so it can reposition itself for new investments in high-growth projects. He said the company will consider pushing more investments toward offshore and liquid natural gas shipping segments.
“We are confident in our ability to find new opportunities to enhance our profitability and shareholder value,” he added.
In February, Teekay said its fourth-quarter earnings fell on the impact of derivatives and other items, though revenue grew. Teekay Tankers swung to a loss as expenses rose and revenue fell.
Teekay Tankers shares were up 4.4% at $5.67 in light trading after hours, while Teekay was inactive after hours, after closing at $35.17.
-By Nathalie Tadena and Ben Fox Rubin, Dow Jones Newswires