Teekay Offshore pens LOI to buy Logitel

Teekay Offshore today said it entered into a letter of intent to acquire Logitel Offshore Holdings Ltd. (Logitel), a Norway -based company focused on the high-end floating accommodation market.

Logitel owns two floating accommodation units, which are based on the Sevan Marine ASA (Sevan) cylindrical hull design, currently under construction at the COSCO Nantong shipyard in China. Logitel also has options with COSCO to order up to six more accommodation units.

The first committed floatel has secured a three-year fixed-rate charter contract, plus extension options, with Brazilian oil company Petrobras. The unit is scheduled for delivery in early-2015. The cylinder-shaped vessel will have the capacity to accommodate 490 persons.

Teekay also expects to secure a charter contract for the second floatel prior to its scheduled delivery in late-2015, adding that the agreement with COSCO for the committed FAUs includes a favorable payment schedule, with the majority of the purchase price due upon delivery.

Teekay Offshore said it planned to finance the Logitel acquisition and the initial newbuilding payments through its existing liquidity and expected to secure long-term debt financing for the units prior to their scheduled deliveries. The proposed acquisition is expected to be finalized in the third quarter of 2014. Financial details of the agreement were not disclosed.