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Teekay Tankers in merger agreement with Tanker Investments

Teekay Tankers in merger agreement with Tanker Investments
Teekay Tankers has signed an agreement to buyout Tanker Investments Ltd (TIL) in a share-for-share merger, and in the process acquiring over $500m worth of modern tankers as well as assuming approximately $350m of TIL’s long term debt.

Teekay Tankers currently owns 3.4m common shares, or 11.3% of TIL.

TIL’s fleet consists of 10 suezmaxes, six aframaxes, two LR2 product tankers with an average age of 7.3 years. Upon completion of the merger, Teekay Tankers fleet will consist of 62 conventional tankers, and leading to a combined total assets of $2.4bn.

The $350m long term debt of TIL that Teekay Tankers will take on involves two revolving credit facilities and a term loan.

Kevin Mackay, Teekay Tankers’ president and ceo, said: “The merger with TIL is expected to be immediately accretive to earnings per share, further strengthens the company’s financial position, and better positions Teekay Tankers to take advantage of the next tanker market upturn.

“Once finalized, the acquisition will lower our average fleet age, reduce our financial leverage and increase our total liquidity position. In addition, with the acquisition of the remaining interest in Teekay Operations, Teekay Tankers has now completed its evolution into a fully-integrated conventional tanker platform with all management and operations now owned and operated solely by Teekay Tankers.”

Teekay Tankers has separately acquired the remaining 50% ownership in Teekay Operations from Teekay Corporation for approximately $27m, absorbing in all commercial and technical management operations.