Teekay, Wah Kwong Shipping in venture

Teekay, Wah Kwong Shipping in venture    Teekay Tankers Ltd. has entered into an equal-stake joint venture agreement with Wah Kwong Shipping of Hong Kong, to invest in construction of a very large crude carrier (VLCC), scheduled for delivery from Shanghai Waigaoqiao shipyard in April 2013.
   Upon delivery, the VLCC will be time chartered to a major Chinese shipping company for five years, the companies said. The time charter includes a fixed floor rate, coupled with a profit-sharing component.
   The contract price for the VLCC is $98 million, to be financed with about $70 million through commercial banks, and the remaining $28 million sourced from the joint venture partners. Teekay Tankers expects its existing revolving credit facility to fund its $14 million share.
   In addition, Teekay Tankers has also received an offer from Teekay Corp. to acquire the 2004-built Aframax tanker Esther Spirit and the 2003-built Suezmax tanker Iskmati Spirit. The Esther Spirit is operating under a fixed-rate time-charter through July 2012 and the Iskmati Spirit is trading in the spot market as part of Teekay’s Gemini Suezmax tanker pool.
   About $100 million in undrawn revolving credit availability secured by the two vessels is also part of the offer from Teekay Corp. If accepted, Teekay Tankers anticipates financing this acquisition by drawing on its existing revolving credit facility, which currently has more than $200 million available, partially as a result of its recently completed follow-on equity offering. If approved, the transaction is expected to be completed in November.