Page 12 of 14 – SEC Filing
December 15, 2015 –
Teekay Corporation, Teekay LNG Partners L.P., and Teekay Offshore Partners L.P. all cut their quarterly dividends to account for
high CapEx budgets and reduced cash flows. Teekay Tankers, in a much better financial position than their related entities, effectively
raised their current dividend by changing their policy to be a variable range of between 30% and 50% of Net Income with a $0.03
minimum quarterly payout. This change in policy indicated that at the end of 2015 a lack of liquidity wasn’t a primary concern
of the board.
December 18, 2015 –
Teekay Tankers purchased 2 purpose-built Lightering Aframax tankers from Teekay Offshore L.P. (once again, a related party) for
an aggregate purchase price of $80 million. This reflects an asset price that we believe to be at or above any other market participant
was willing to pay. The transaction was completed through the assumption of a $50 million revolving credit facility from Teekay
Offshore and $30 million of existing TNK liquidity. Despite their constant calls for delevering, management instead added debt
to the balance sheet and moved excess liquidity to a sister company through the transaction.
December
31, 2015 – Teekay Tankers had total liquidity of $111.0 million (comprised of $96.4 million in cash and cash equivalents
and $14.6 million in undrawn revolving credit facilities), compared to total liquidity of $206.2 million as of September 30, 2015.
The decrease in the Company’s liquidity position during the fourth quarter was primarily due to vessel acquisitions,
a scheduled amortization on one of the Company’s corporate revolving credit facilities, drydocking costs, and working capital
timing differences.
December
2016 / January 2017 – During December 2016 and January 2017, the Company
sold an aggregate of 8,975,172 common shares at an average price of $2.40 per share, generating net proceeds of approximately $21.2
million, of which Teekay Tankers sold 6,820,000 common shares under its continuous offering program and 2,155,172 common shares
in a private placement to Teekay Corporation in another related-party transaction.
May
31, 2017 – Teekay Tankers Ltd. announced that it agreed to acquire
all the remaining issued and outstanding shares of Tanker Investments Ltd. in a share-for-share merger at an exchange ratio of
3.30 Teekay Tankers Class A common shares for each TIL common share (Teekay Tankers owns 3.4 million common shares, or 11.3 percent,
of TIL). This price represented over a 20% premium for TIL shares and would require TNK to issue an additional 88.9 million
of Class A shares on a prior base of approximately 142 million shares. (TNK is down approximately 74.94% since December
14, 2015)
May
31, 2017 – Teekay Tankers announced the acquisition of the remaining
50 percent ownership in Teekay Operations, from Teekay Corporation (a related party), for approximately $27 million. As compensation,
Teekay Tankers issued to Teekay Corporation approximately 13.8 million Class B common shares. Class B shares are 100% owned by
Teekay Corporation and in the last 3 years have twice been issued to Teekay Corporation as payment for related party acquisitions.
These transactions have and will help Teekay Corp maintain voting control of TNK in spite of the potential issuance of Class A
shares related to the TIL transaction.
Since the May 31, 2017 announcement of
these 2 related-party transactions, the Class A shares are down approximately another 9%, which we believe indicates the market
is not supportive of these deals as well.
