Shipowner Teekay LNG Partners is limbering up to reassess its existing and future fleet with the cash it expects to receive on the closing of its $6.2bn sale to infrastructure investment firm Stonepeak.

In the company's third-quarter results statement, Teekay Gas Group president and chief executive Mark Kremin said Teekay LNG will have greater access to competitively priced capital under the new structure, which could be used "for both fleet renewal and potential future growth".

Such capital "has not been available to Teekay LNG through the public capital markets for many years".

On 4 October, Teekay LNG announced it had reached a "merger agreement" with Stonepeak following a review of the strategic alternatives available to the company.

Subsequently, a Norwegian bondholder meeting on 27 October approved amendments to bonds maturing in 2023 and 2025 required for the transaction to go through.

Shareholders are due to vote on the deal on 1 December.

Closing

Teekay LNG said the transaction is expected to close on or soon after 31 December, with the merger agreement stipulating that it will not close before then.

On closing, Teekay LNG Partners' common shares will be delisted from the New York Stock Exchange. Its series A and B preferred shares will continue to trade.

Teekay Corp, which owns 41% of Teekay LNG, has entered into a voting and support agreement for the merger.

Mixed fortunes

On Thursday, Teekay LNG reported improved third-quarter net income, which grew to $70.3m from $40.3m in the same period of last year.

But voyage revenue for the quarter slipped to $146.6m from $148.9m a year earlier, and income from vessel operations also fell.

Teekay LNG said its net income results were impacted by an increase in general and administrative expenses relating to the Stonepeak deal, along with an increase in scheduled off-hire days due to vessel upgrades and dry-dockings.

The redeployment of two LNG carriers fixed at lower rates in March and August also hit the figures.

But numbers were positively impacted by foreign currency and derivatives gains during the quarter compared with losses on both in the previous three months.

Kremin said: “While we were once again well-served by our strong contract coverage, Teekay LNG's third-quarter results were, as expected, negatively impacted by a heavier-than-normal dry-dock schedule, partially offset by lower operating expenses and stronger results in our multi-gas carrier fleet."

Teekay LNG controls a 75-ship fleet comprising 47 LNG carriers and 38 LPG and multigas ships. In addition, the company owns a 30% stake in the Bahrain LNG import terminal.