Teekay Offshore Orders Two Shuttle Tankers, Forms New Unit

Teekay Offshore Partners (TOO) has entered into conditional contracts with Samsung Heavy Industries (SHI) to construct two Suezmax-size DP2 shuttle tankers, with options to order up to two additional vessels.

Upon delivery in 2019 and 2020, the 154,000 dwt vessels will provide shuttle tanker services in the North Sea under Teekay Offshore’s existing master agreement with Statoil ASA (Statoil).

As informed, the new vessels will be constructed based on TOO’s new Shuttle Spirit design which incorporates technologies aimed at increasing fuel efficiency and reducing emissions, including LNG propulsion technology.

What is more, Teekay Offshore revealed plans to transfer its shuttle tanker business into a new subsidiary, Teekay Shuttle Tankers (ShuttleCo).

This follows a contract signed between Teekay Corporation, Teekay Offshore and Brookfield Business Partners as well as its institutional partners to enter into a strategic partnership. The deal includes a USD 640 million investment in Teekay Offshore. Following the investment, Brookfield will own approximately 60 percent share in Teekay Offshore.

As part of the formation of ShuttleCo, a majority of Teekay Offshore’s shuttle tanker fleet will be refinanced with a new USD 600 million, five-year debt facility, and two 50 percent-owned vessels will be refinanced with a new USD 71 million, four-year debt facility.

In addition, an existing USD 250 million debt facility secured by the three East Coast Canada newbuildings and an existing USD 143 million private placement project bond financing secured by two vessels, will be transferred from Teekay Offshore to ShuttleCo, the company said.

Separately, Teekay Offshore informed that Teekay Shuttle Tankers has completed an offering of USD 250 million of new senior unsecured bonds in the Norwegian bond market. The new bonds will have a coupon of 7.125 percent and mature in August 2022.

In connection with the bond issuance, and Teekay Shuttle Tankers’ acquisition of the shuttle tanker business, Teekay Offshore will repurchase approximately NOK 199 million of its TOP02 bonds maturing in November 2018 at a price of 101 percent of par value and approximately NOK 512 million of its TOP04 bonds maturing in December 2018 at a price of 101 percent of par value.

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