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Teekay creates private equity-backed tanker firm TIL

Teekay creates private equity-backed tanker firm TIL
Teekay Corporation and Teekay Tankers have created Tanker Investment Limited (TIL) and have each invested $25m in the spin-off's $250m private equity offering.

TIL will use its capital to buy four 2009 and 2010-built aframax crude carriers for $116m, as well as assuming the debt for four 2009-built suezmaxes from Teekay Corporation, the last of the parent company's conventional tanker fleet, for a purchase price of around $163m.

Remaining funds will be used to expand TIL's fleet, with a view to acquire, operate and sell secondhand tankers to take advantage of a market upturn.

It was also announced that Teekay Tankers will take on the commercial and technical management of conventional tankers from the parent company, including ownership in a trio of commercial tanker pools with 82 commercially managed and 49 technically managed vessels. TIL's fleet will be managed by the newly transferred operations department, with Teekay Tankers pocketing the management fees.

The offering is expected to close on 24 January, with investors from the US, UK and Norway backing the company, which will be listed on the Oslo over the counter market in the next few months. Delivery of the first eight vessels should be completed in the first half of 2014.

"This transaction complements our existing strategy of owning and in-chartering conventional tankers," commented Bruce Chan, Teekay Tankers' ceo. "In addition, our planned acquisition of Teekay Operations represents the final step in Teekay Tankers' evolution into a full-service conventional tanker platform, which we believe will allow us to better serve our customers and generate greater value for Teekay Tankers."

Peter Evensen, Teekay Corporation's president and ceo added: "With the sale of our last four owned conventional tankers to TIL, Teekay Corporation is one step closer to achieving its strategy of becoming an asset-light company primarily focused on increasing the value of its daughter entities."

DNB Markets advised to Teekay Tankers and Teekay Corporation TIL's creation, DNB Markets and Pareto Securities are acting as joint book runners for the private equity deal.