Owner and operator of LNG carriers Teekay LNG Partners has refinanced an outstanding debt facility of USD 58 million due in 2018.
The company said that the refinancing was enabled by a new USD 90 million long-term debt facility, maturing in 2024, secured by seven mid-sized LPG carriers trading in the Teekay Multigas Pool.
The new in-house pool was launched in November 2017 and is intended for ethylene-capable liquefied petroleum gas (LPG) and small-scale liquefied natural gas (LNG) vessels.
According to Mark Kremin, President and Chief Executive Officer of Teekay Gas Group, the company is making significant progress on the remaining refinancings, which are on track to be completed within the third quarter of 2018.
The refinancing was revealed in the company’s financial report for the first quarter of this year.
Teekay LNG ended the quarter with a GAAP net loss attributable to the partners and preferred unitholders of USD 6.9 million.
As explained, the financial performance was impacted by the write-down of three conventional tankers, and restructuring charges incurred from the sale of a conventional tanker, among other things.
“The results for the first quarter of 2018 included certain non-recurring items relating to a tax indemnification guarantee liability and lower utilization on some of our LPG carriers as they are transitioning into our Teekay Multigas Pool,” commented Kremin.
“Despite these items, we continue to generate stable cash flows and I am pleased to report that since releasing our earnings in mid-February, we have made significant progress on various initiatives across the organization.”
Since the beginning of 2018, the partnership has taken delivery of four LNG carrier newbuildings, all on long-term charters, and one mid-sized LPG carrier newbuilding.
The company has also re-chartered the Arctic Spirit and Polar Spirit LNG carriers for four years and one year, respectively, and extended the charter on the Torben Spirit LNG carrier until December 2018.
“These new charter contracts, which will service the fast-growing LNG import market in China, will add further stability to Teekay LNG’s market-leading portfolio of forward fixed-rate revenues. Looking ahead, we are excited by the strong LNG demand fundamentals and our position as one of the world’s largest LNG transportation companies,” Kremin added.
The company has 11 more ships scheduled for delivery from their yards through early 2020.
As they are all employed on long-term charter contracts, Teekay LNG expects to achieve further cash flow growth once they are delivered.