March 4, 2010
HAMILTON, BERMUDA–(Marketwire – March 4, 2010) – Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE:TGP), today announced that it has agreed to acquire two 2009-built Suezmax tankers, the Bermuda Spirit and the Hamilton Spirit, and one 2007-built Handymax product tanker, the Alexander Spirit, from Teekay Corporation (NYSE:TK) for a total purchase price of $160 million. Teekay LNG will finance the purchase by assuming $126 million of existing debt related to two of the ships, and cash-on-hand for the remaining $34 million. The Partnership does not anticipate raising further equity to complete this acquisition. The transaction, which is subject to standard closing conditions, is expected to be completed by mid-March 2010.
The Bermuda Spirit and the Hamilton Spirit are currently serving under 11-year fixed-rate contracts to Centrofin, an international owner of 28 vessels, and the Alexander Spirit is currently employed on a 10-year fixed-rate contract to Caltex Australia. These ships will join the Partnership’s Conventional Tanker Segment which currently includes eight Suezmaxes, all on long-term fixed-rate charter. During the contract periods, the newly acquired vessels are expected to generate distributable cash flow of approximately $8 million per annum. As a result, management of the Partnership’s General Partner intends to recommend that its Board of Directors increase the Partnership’s current quarterly cash distribution of $0.57 per unit by $0.03 per unit, or 5.3 percent, commencing with the first quarter distribution to be paid in May 2010.
The Board of Directors of the Partnership’s General Partner and its Conflicts Committee have both approved the transaction. To assist in its evaluation of the transaction, the Conflicts Committee retained independent legal advisors and obtained independent vessel valuations.
More information about the transaction will be provided on the Partnership’s Fourth Quarter and Fiscal Year 2009 Earnings conference call to be held on Friday March 5th at 11:00 am (ET). All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:
– By dialing (800) 820-0231or (416) 640-5926 , if outside North America, and quoting conference ID code 5033499.
– By accessing the webcast, which will be available on Teekay LNG’s Web site at www.teekaylng.com (the archive will remain on the Web site for a period of 30 days).
A Fourth Quarter and Fiscal Year 2009 Earnings Presentation will also be available at www.teekaylng.com in advance of the conference call start time.
About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is a publicly-traded master limited partnership formed by Teekay Corporation (NYSE:TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors. Teekay LNG Partners L.P. provides LNG, LPG and crude oil marine transportation services under long-term, fixed-rate time-charter contracts with major energy and utility companies through its fleet of fifteen LNG carriers, six LPG/Multigas carriers and eight Suezmax class crude oil tankers. Three of the six LPG/Multigas carriers are newbuildings scheduled for delivery in 2010 and 2011. Teekay LNG Partners’ common units trade on the New York Stock Exchange under the symbol “TGP”. FORWARD LOOKING STATEMENTS This release contains forward-looking statements within the meaning of U.S. federal securities laws, which reflect management’s current views with respect to certain future events and performance, including statements regarding: the expected timing of completing the acquisition of the two Suezmaxes and one product tanker; the expected annual cash flow from vessel operations and distributable cash flow from the two Suezmaxes and one product tanker; and the expectation of increasing Teekay LNG’s cash distributions in the first quarter of 2010. 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: early termination or breach of one or more of the charter contracts; the required approval by the Board of Directors of the Partnership’s General Partner to increase the Partnership’s cash distribution; and other factors discussed in Teekay LNG’s filings from time to time with the SEC, including its Report on Form 20-F for the fiscal year ended December 31, 2008. The Partnership 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 Partnership’s expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.