Teekay Tankers Prices Public Offering

Thursday, April 08, 2010

Teekay Tankers Ltd. (NYSE: TNK) announced that it has priced its follow-on public offering of 7,700,000 shares of Class A common stock at $12.25 per share. The offering is expected to close on April 9, 2010, subject to customary closing conditions. Teekay Tankers has granted the underwriters a 30-day option to purchase up to an additional 1,155,000 shares to cover any over-allotments. The number of shares offered in this offering was increased from 7,000,000 shares to 7,700,000 shares (the over-allotment option was increased from 1,050,000 shares to 1,155,000 shares).

The company expects to use the net offering proceeds - together with a concurrent issuance to Teekay Corporation (NYSE: TK) of 2,612,244 unregistered shares of Class A common stock at $12.25 per share and borrowings under the company's revolving credit facility for the balance - to acquire three oil tankers from Teekay Corporation for aggregate consideration of approximately $168.7m.

The company plans to acquire the following three Vessels: the 2004-built Suezmax tanker, the Kaveri Spirit, a Suezmax tanker currently participating in a Suezmax tanker pool; the 2002-built Suezmax tanker, the Yamuna Spirit, a Suezmax tanker currently operating under a fixed-rate, time-charter contract that is scheduled to expire in May 2012 and includes a profit share component; and the 2005-built Aframax tanker, the Helga Spirit, an Aframax tanker currently operating under a fixed-rate, time-charter contract that is scheduled to expire in October 2010.

As a result of the acquisition of the vessels and the sale of an Aframax tanker, the Falster Spirit, which the company has agreed to sell to a third party and is expected to be delivered to its purchaser in mid-April 2010, the company's net fleet capacity will increase by approximately 23 percent to a total of approximately 1.8 million deadweight tonnes. If the underwriters exercise their option to purchase additional shares to cover over-allotments, the Company will use those net proceeds to help finance the acquisition of the vessels, which would reduce borrowings under the Company's revolving credit facility.

Teekay Tankers Ltd. was formed in December 2007 by Teekay Corporation as part of its strategy to expand its conventional oil tanker business. Teekay Tankers currently owns a fleet of nine double-hull Aframax tankers (including the Falster Spirit) and three double-hull Suezmax tankers, which an affiliate of Teekay Corporation manages through a mix of short- or medium-term fixed-rate, time-charter and spot-tanker-market trading. Teekay Tankers will acquire from Teekay Corporation the Vessels upon the closing of the offering. Teekay Tankers intends to continue to distribute on a quarterly basis all of its cash available for distribution, subject to any reserves established by its board of directors.

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