Canadian asset manager Brookfield Business Partners will buy 60 percent of Teekay Offshore Partners, a subsidiary of marine transportation provider Teekay Corp, for about $750 million, Reuters reported quoting company sources.
Brookfield said it would invest $610 million to buy the stake in Teekay Offshore and will also acquire a $200 million loan given by Teekay Corp to Teekay Offshore.
Teekay Corp in a separate statement said, following the transaction, it would own 14 percent of Teekay Offshore.
“We are excited to have Brookfield join us as a strategic partner and co-sponsor of Teekay Offshore, which is a strong endorsement of Teekay Offshore’s leading market positions in the marine infrastructure space,” commented Kenneth Hvid, Teekay’s President and CEO.
“The combination of Teekay’s operational platform and Brookfield’s global business platform and access to long-term capital is a complementary fit and creates one of the world’s strongest offshore marine infrastructure companies. Out of the range of alternatives evaluated, we believe this comprehensive solution represents the best possible outcome for all of our long-term stakeholders and positions Teekay Offshore to benefit from an energy market recovery," he added.
This transaction maintains the stability of Teekay Offshore’s significant forward cash flows and also improves Teekay Parent’s financial position by eliminating all of its financial guarantees to Teekay Offshore and increasing its own liquidity by approximately $140 million. This will enhance Teekay Parent’s ability to be a supportive sponsor to all of its Daughter companies going forward.
“Brookfield’s co-sponsorship in Teekay Offshore provides both immediate and long-term benefits,” commented Ingvild Sæther, President and CEO of Teekay Offshore Group Ltd.
Teekay Offshore has ordered two shuttle tanker newbuildings, which will serve under the Master Agreement with Statoil, with the option to order two additional vessels under similar terms.