Teekay Tankers Ltd.

Teekay Tankers Ltd.

October 18, 2010 19:57 ET

Teekay Tankers Ltd. Announces China Joint Venture and Offer to Acquire Two Tankers

HAMILTON, BERMUDA--(Marketwire - Oct. 18, 2010) - Teekay Tankers Ltd. (NYSE:TNK) -


  • Entered into joint venture to acquire Chinese-built VLCC newbuilding with 2013 delivery, to be time-chartered to major Chinese shipping company.
  • Received offer to acquire one Aframax and one Suezmax tanker

Teekay Tankers Ltd. (Teekay Tankers or the Company) today announced that it has entered into a 50/50 joint venture agreement with Wah Kwong Shipping of Hong Kong, to jointly invest in a Very Large Crude Carrier (VLCC) newbuilding scheduled to deliver from Shanghai Waigaoqiao shipyard in April 2013. Upon its delivery from the shipyard, the VLCC will be time-chartered to a major Chinese shipping company for a period of five years. The time-charter includes a fixed floor rate, coupled with a profit-sharing component.

The contract price for the VLCC is $98 million, of which the joint venture expects to finance approximately $70 million through commercial banks, with the remaining $28 million sourced from the joint venture partners. Teekay Tankers expects to use availability under its existing revolving credit facility to fund its 50 percent portion of the equity requirement of approximately $14 million.

"I am pleased we have been able to further develop Teekay Corporation's long-standing commercial relationship with Wah Kwong Shipping into an exciting new shipping project in China," commented Bruce Chan, Teekay Tankers' CEO-elect. Mr. Chan continued, "We believe this is an attractive way of expanding our exposure to China and to the VLCC segment which we view as a natural extension of our franchise."

In addition, the Company also announced today that it has received an offer from Teekay Corporation (Teekay) (NYSE:TK) to acquire the 2004-built Aframax tanker, Esther Spirit (and its associated time-charter contract) and the 2003-built Suezmax tanker, Iskmati Spirit. The Esther Spirit is currently operating under a fixed-rate time-charter (with a profit share component) through July 2012 and the Iskmati Spirit is trading in the spot market as part of Teekay's Gemini Suezmax tanker pool. Approximately $100 million in undrawn revolving credit availability secured by the two vessels is also part of the offer from Teekay Corporation. If accepted, Teekay Tankers anticipates financing this acquisition by drawing on its existing revolving credit facility, which currently has over $200 million of undrawn availability partially as a result of its recently completed follow-on equity offering. 

This offer is currently being reviewed by Teekay Tankers' Board of Directors and its Conflicts Committee, which is made up of the Company's three independent directors. If approved, the transaction is expected to be completed in November 2010.

About Teekay Tankers

Teekay Tankers Ltd. was formed in December 2007 by Teekay Corporation (NYSE:TK) as part of its strategy to expand its conventional oil tanker business. Teekay Tankers currently owns a fleet of nine double-hull Aframax tankers and five double-hull Suezmax tankers, which an affiliate of Teekay Corporation manages through a mix of short- or medium-term fixed-rate time-charter contracts and spot tanker market trading. In addition, the Company has received an offer to acquire from Teekay Corporation one Aframax tanker and one Suezmax tanker. Teekay Tankers intends to distribute on a quarterly basis all of its cash available for distribution, subject to any reserves established by its board of directors.

Teekay Tankers' common stock trades on the New York Stock Exchange under the symbol "TNK".


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: the expected financing of the VLCC newbuilding, including the equity portion to be contributed by the Company; the timing of delivery of the VLCC newbuilding and the commencement of its time-charter contract; the timing and certainty of the acceptance by the Company's Board of Directors and its Conflicts Committee of an offer to acquire the Esther Spirit and Iskmati Spirit from Teekay Corporation; and the Company's ability to finance the acquisition of these vessels through its revolving credit facility. 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: changes in the commercial bank financing market; failure by the Company's Board of Directors to accept the offer from Teekay Corporation to acquire the Esther Spirit and Iskmati Spirit; potential shipyard delays in the construction of the VLCC newbuilding; the potential termination of the five-year time-charter relating to the VLCC newbuilding; and other factors discussed in Teekay Tankers' filings from time to time with the U.S. Securities and Exchange Commission, including its Report on Form 20-F for the year ended December 31, 2009. 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.

Contact Information

  • Teekay Tankers Ltd.
    Kent Alekson
    Investor Relations Enquiries
    +1 (604) 844-6654
    Teekay Tankers Ltd.
    Alana Duffy
    Media Enquiries
    +1 (604) 844-6631