October 19, 2010
VANCOUVER, BRITISH COLUMBIA–(Marketwire – Oct. 18, 2010) – Teekay Corporation (NYSE:TK) –
- Announced intention to commence repurchasing Teekay Corporation shares under existing $200 million share repurchase authorization
- Offered to sell one Aframax tanker and one Suezmax tanker to Teekay Tankers
- Completed sale of one FPSO and one shuttle tanker newbuilding to Teekay Offshore for total proceeds of approximately $286 million
- Agreed to sell two additional shuttle tanker newbuildings to Teekay Offshore in January and July 2011, respectively, for total proceeds of approximately $260 million
Teekay Corporation (Teekay or the Company) today announced that management intends to resume repurchasing shares under the Company’s $200 million share repurchase authorization. Shares will be repurchased in the open market at times and prices considered appropriate by the Company. The timing of any purchases and the exact number of shares to be purchased will be dependent on market conditions.
Teekay also announced today that it has offered to sell to its publicly-traded subsidiary, Teekay Tankers Ltd. (NYSE:TNK), one 2004-built Aframax tanker, the Esther Spirit, and one 2003-built Suezmax tanker, the Iskmati Spirit, at their fair market value, subject to review by the Teekay Tankers’ Board of Directors and its Conflicts Committee. If approved, the transaction is expected to be completed in November 2010.
In addition, Teekay announced that it has completed the previously announced sale of the Cidade de Rio das Ostras (Rio das Ostras) floating production storage and offloading (FPSO) unit to its publicly-traded subsidiary, Teekay Offshore Partners L.P. (NYSE:TOO) (Teekay Offshore) and the first of its four newbuilding shuttle tankers, the Amundsen Spirit, to Teekay Offshore’s 51 percent-owned subsidiary, Teekay Offshore Operating L.P. (OPCO) for approximately $286 million in total. In addition, the Company has agreed to sell the second and third of the four shuttle tanker newbuildings, the Nansen Spirit and the Peary Spirit, to OPCO when these vessels commence their long-term time-charter contracts with Statoil ASA scheduled in January and July 2011, respectively, for total proceeds of approximately $260 million.
Commenting on the commencement of share repurchases, Bjorn Moller, Teekay’s President and Chief Executive Officer stated, “While the value of Teekay shares has increased by over 20 percent since January 2010, we believe the Company’s underlying asset value, substantial fixed-rate cash flows and overall financial strength are not appropriately reflected in Teekay’s current stock price.” Mr. Moller added, “Over the past year Teekay has completed over $1 billion of asset sales to our daughter companies and third parties, which has enabled us to significantly reduce our net debt and build up substantial liquidity. With Teekay shares trading at approximately 40 percent of their ‘sum-of-the-parts’ value, we believe that repurchasing shares represents a good opportunity to invest in the underlying value of our assets at an attractive price.”
Teekay Corporation transports approximately 10% of the world’s seaborne oil, has built a significant presence in the liquefied natural gas shipping sector through its publicly-listed subsidiary Teekay LNG Partners L.P. (NYSE:TGP), is further growing its operations in the offshore oil production, storage and transportation sector through its publicly-listed subsidiary Teekay Offshore Partners L.P. (NYSE:TOO), and continues to expand its conventional tanker business through its publicly-listed subsidiary Teekay Tankers Ltd. (NYSE:TNK). With a fleet of over 145 vessels, offices in 16 countries and approximately 6,100 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, helping them link their upstream energy production to their downstream processing operations.
Teekay’s common stock is listed on the New York Stock Exchange where it trades under the symbol “TK”.
FORWARD LOOKING STATEMENTS
This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding: Teekay’s share repurchase program and the current valuation of Teekay’s common shares; the proposed tanker sales to Teekay Tankers Ltd. and the expected completion date thereof; and the expected commencement dates of the time-charter contracts for the newbuilding shuttle tankers Nansen Spirit and Peary Spirit. The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: changes in the price of Teekay’s common stock generally or relative to alternative uses of Teekay’s cash; acceptance by Teekay Tankers Ltd. of Teekay’s offer to sell two tankers and the timing to complete any such transaction; and potential delivery delays of the Nansen Spirit and the Peary Spirit newbuilding shuttle tankers or potential termination by the charterer of the related time-charter contracts; and other factors discussed in Teekay’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2009. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.