Teekay Tankers Seals USD 533 Mn Loan, Sells Assets

TankerIllustration. Image Courtesy: Pexels under CC0 Creative Commons license

New York-listed tanker owner Teekay Tankers has closed a new five-year, USD 533 million revolving credit facility to refinance 31 vessels, the company announced.

The shipowner plans to use the proceeds from the debt facility to repay approximately USD 455 million of its existing debt.

“We are grateful for the continued strong support we receive from our bank group, as represented by our new USD 533 million debt facility, which was approximately two times oversubscribed, and provides the company with increased financial flexibility,” Kevin Mackay, Teekay Tankers’ President and CEO, said.

The new debt facility extends balloon maturities from 2020/2021 until the end of 2024.

The size of the loan was reduced since announcing the term sheet signing in November 2019 as a result of excluding five vessels from the new facility, including three 2003-built Suezmax tankers that were sold for a total of USD 57 million.

The first vessel was delivered to the buyer in December 2019 and the remaining two vessels are expected to be delivered during February 2020, according to Teekay.

The proceeds from the vessel sales will be used to cut debt, including USD 30 million of debt directly secured by these three ships.

Teekay Tankers added that it had reached an agreement with Hili Ventures to sell a portion of its oil and gas ship-to-ship transfer support services business, for approximately USD 26 million.

The sale is expected to close late in the first quarter of 2020 or early in the second quarter of 2020.

The company said it would retain its entire Full-Service Lightering business that operates in the U.S. Gulf, which provides ship-to-ship oil transfers for both U.S. crude imports and exports.

In addition, the tanker owner added it would continue to operate oil ship-to-ship transfer support services in North America and the Caribbean, a business that has synergies with its core Full-Service Lightering business.

“We are excited to announce these opportunistic asset sales for combined proceeds of approximately USD 83 million, which is consistent with our strategy presented at our November 2019 Investor Day and accelerates our planned balance sheet delevering efforts,” commented Mackay.

 “The sale of a portion of our ship-to-ship transfer business also allows us to focus and simplify our core business of crude oil and clean product shipping. Importantly, by retaining our core Full-Service Lightering business in the U.S. Gulf, we will continue to benefit from U.S. import and growing export volumes, which provides synergies with our existing Aframax tanker fleet.”

The latest moves are expected to increase the company’s liquidity by around USD 73 million.

Teekay Tankers currently owns a fleet of 55 double-hull tankers, has six time-chartered-in tankers, and has interests in five ship-to-ship support vessels. The company also owns a Very Large Crude Carrier (VLCC) through a 50 percent-owned joint venture.

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