Teekay Offshore Partners (TOO) is to issue two private placements of its equity securities, worth a combined $200m, to fund the company’s existing newbuilding installments, capital conversion projects and other general purposes.
Some $100m of TOO’s common units will also be issued to a group of unidentified investors, priced at $4.55 per unit, which was their closing price on Thursday.
Another $100m of TOO’s 10.5% Series D cumulative exchangeable perpetual preferred units will be offered to a group of investors.
The investors will also receive around 4.5m warrants with an exercise price of $4.55 per unit, and 2.25m warrants with an exercise price of $6.05 per unit, which is a 33% premium on Thursday’s closing price.
These units are exchangeable into the partnership’s common units or may be redeemed by TOO at any time after five years.
“These equity issuances represent the most significant components of Teekay Offshore’s previously announced financing initiatives,” Peter Evensen, Teekay Offshore’s CEO, said in a release.
“With the pricing and placement of these offerings, we remain on track to complete all of our financing initiatives by June 30, 2016. Together with cash flow from operations, these financing initiatives, which include bank financings totaling $400m, are expected to cover all of our medium-term liquidity requirements and fully finance Teekay Offshore’s $1.6bn of committed growth projects scheduled to deliver through 2018, which we expect will contribute to further growth of our distributable cash flow.