Teekay Corp is looking to future opportunities after striking a deal to sell out of its LNG and LPG carrier spin-off.
The $6.2bn sale of Teekay LNG Partners to infrastructure investment firm Stonepeak will see the Vancouver-based parent company pocket $640m from offloading its 40% stake.
That will leave Teekay Corp completely debt free with some $325m in cash, company executives said at a conference call with analysts.
Teekay Corp, which also sold out its Teekay Offshore Partners spin-off last year, will also have just Teekay Tankers as its only publicly-listed daughter company.
"This transaction transforms Teekay's balance sheet and gives us the financial flexibility and dry powder to pursue future opportunities," said chief executive Kenneth Hvid.
He said the deal puts the company in a position to leverage its operating franchise and capabilities to pursue attractive opportunities.
The company may pursue those opportunities on its own, or with Teekay Tankers or an outside partner, Hvid explained.
"We truly believe that it is important to buy assets at the right time, and in order to do that we need to have a strong balance sheet and prompt access to capital in order to take advantage of attractive investment opportunities and at times act counter cyclically," he said.
Hvid pointed to a positive outlook for the future of tankers but said the company also could explore investing in other sectors, including those that Teekay has been involved in before.
But the energy shipping giant is also looking to other horizons, and he said Teekay has a track record of moving into new sectors.
However, the executive acknowledged the growing focus on energy transition.
"We also recognise that the world is changing, and while we believe that oil will remain an important component of the world's energy mix for many decades, we also see that the increasing focus on greater energy diversification and lower emissions will bring other interesting opportunities where Teekay's unique capabilities and profile could be a meaningful competitive advantage," he said.
Teekay could find an opportunity in green technology, for example.
Hvid said the Teekay group has built a strong brand and reputation since it was founded by Torben Karlshoej almost 50 years ago.
"We have a track record of growing and scaling businesses, customer relations and partnerships, along with various other capabilities," he said.
As TradeWinds has reported, Teekay LNG also sees the Stonepeak deal as a way to enable new investment.
Teekay Gas Group president and chief executive Mark Kremin said the company will have greater access to competitively priced capital under the new structure, which could be used "for both fleet renewal and potential future growth".
He said that kind of capital has been unavailable to Teekay LNG in the public capital markets for some time.
On Thursday, Teekay Corp reported a net loss of $2.91m for the third quarter, which was a drop from the $35.4m loss a year earlier.
Adjusted net income, which excludes non-cash and one-time charges that are not tracked by analysts, came in at just $95,000, down from $15.2m in the third quarter of 2020.
