Teekay Tankers Ltd, the world’s largest operator of mid-size tankers announced that has signed an agreement to acquire twelve modern Suezmax tankers for $662 million aggregate purchase price. Principal Maritime Tankers, which is a portfolio company of funds managed by affiliates of Apollo Global Management, LLC is the current owner of the fleet.
Teekay Tankers' revenues are expected to increase immediately after the joining of the new supplement to the current fleet of the company, meaning free cash flow and net asset value per share.
The twelve new Suezmax tankers will join the company’s current fleet of 10 Suezmaxes. All Suezmax tankers together will position Teekay Tankers as one of the world’s largest owners of of ships in this category.
The current company fleet has an average age of 5.5 years. After the acquiring it will be reduced to 1.2 years. The 12 new vessels are expected to be delivered to Teekay Tankers by the end of October 2015. Soon after their delivery, the ships will begin service in the spot tanker market.
The purchase funding for the fleet of twelve Suezmaxes was arranged in advance.
The company has received commitments from four of its key lenders to provide a new debt facility of approximately $400 million to be secured by the acquired ships.
Further to that, Teekay Tankers has signed an agreement for the issue of new Class A common shares at a weighted average price of $6.76 per share for the amount of $ 50m to Principal, $ 30m to Teekay Corporation and $ 60m to a group of institutional investors.
The rest amount necessary for the ships acquisition will be funded from the existing liquidity of Teekay Tankers, which according to the company’s statement was nearly $ 230m at June 30, 2015. In this amount is included $ 37.3m of net proceeds received during the second quarter of 2015 from the issuance of common units under the company's continuous offering program.
Kevin Mackay, Teekay Tankers' Chief Executive Officer commented:
"The acquisition of this high quality, on-the-water fleet is strategically important for Teekay Tankers and provides significant commercial and financial benefits. Teekay Tankers will become one of the largest owners of modern Suezmax tankers at the right point in the tanker market cycle when positive market fundamentals support continued strength in spot tanker rates. Including the five Aframax tankers we acquired earlier this year, this acquisition will increase Teekay Tankers' owned fleet by over 60 percent and solidifies our position as the largest owner and operator of mid-size crude oil tankers. This significant increase in our scale will allow us to further optimize our fleet efficiencies, enhance our service offering to both existing and new customers across more regions, and expand our presence in the evolving global Suezmax trade-routes. With a larger fleet, we are better positioned take advantage of the growing demand for Suezmaxes resulting from greater long-haul Suezmax movements from the Atlantic to Pacific basins as well as the niche intra-regional voyages that are increasingly stretching Suezmax tonnage supply."