Teekay Corp in a Refinancing Swoop as It Books Bigger Loss in Q1

  • Business & Finance

Teekay Corporation has reported a widened loss for the first quarter of this year booking USD 48.8 million GAAP net loss against USD 9.76 million reported in the corresponding period last year.

The company’s consolidated cash flow from vessel operations (CFVO) increased to USD 359 million from USD 320.9 million in the prior year, primarily due to higher cash flows from Teekay Offshore related to the charter contract commencements for the Petrojarl Knarr FPSO unit and the Arendal Spirit Unit for Maintenance and Safety (UMS) and the acquisition of six long-distance towing and offshore installation vessels during 2015.

The cash flow was also boosted from Teekay Tankers as a result of its acquisition of 19 modern conventional tankers during 2015, partially offset by lower spot tanker rates.

In addition, Teekay said these increases were partially offset by lower cash flows from Teekay Parent related to off-hire and higher repairs and maintenance costs due to the temporary loss of two mooring lines on the Banff FPSO and the lay-up of the Polar Spirit and Arctic Spirit LNG carriers.

According to Peter Evensen, Teekay Corporation’s President and Chief Executive Officer, Teekay has completed or is nearing completion of a number of financing initiatives at each entity with the aim of boosting its financial position.

Teekay Parent has completed a USD 50 million debt refinancing and has secured commitments of USD 262 million towards refinancing two debt facilities, and today entered into an agreement to issue USD 100 million in shares of common stock, USD 40 million of which is to be issued to two trusts established by the company’s late founder, including Resolute Investments, Teekay Parent’s largest shareholder.

“Upon our anticipated completion of these initiatives, Teekay Parent will have significantly reduced its financial leverage, increased its liquidity and enhanced its ability to provide continued sponsorship of its two master limited partnerships, which we believe strengthens the entire Teekay Group,” Evensen added.

In addition, Teekay Offshore is also nearing completion of a number of financing initiatives, including a USD 200 million preferred equity offering, which upon anticipated completion of the combined initiatives, are expected to fully fund its growth capital expenditures through 2018 and address its near- and medium-term debt maturities.

“Executing on Teekay LNG’s robust pipeline of profitable growth projects that are scheduled to deliver in 2016 through 2020 also remains a top priority, and we continue to make significant progress on securing financing for Teekay LNG’s remaining newbuildings. Finally, earlier this year, Teekay Tankers completed a USD 900 million debt facility, which extends its debt maturity profile and provides financial flexibility,” he added.

Teekay Tankers reported adjusted net income attributable to shareholders of USD 46 million, compared to USD 39 million for the same period in the prior year. On a GAAP basis, net income was USD 39 million.

Teekay LNG Partners L.P. generated distributable cash flow of USD 54.4 million compared to USD 66.2 million in the same period of the prior year. The Partnership reported net loss of USD 37.1 million for three months ended March 31, 2016.


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