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Closing Of Stonepeak’s Acquisition of Teekay LNG

Teekay Corporation announced the closing of the previously announced merger of Teekay LNG with investment vehicles managed by Stonepeak.

As part of the Merger, Teekay sold all of its ownership interest in Teekay LNG, including approximately 36.0 million Teekay LNG common units, and Teekay GP L.L.C., Teekay LNG’s general partner (equivalent to approximately 1.6 million Teekay LNG common units), for $17.00 per common unit or common unit equivalent in cash, and transferred various management services companies to Teekay LNG that provide the operations for Teekay LNG and certain of its joint ventures under existing management services contracts. As consideration, Teekay received total gross cash proceeds of approximately $641 million.

In mid-December 2021, Teekay elected to redeem all of its outstanding 9.25 percent Senior Secured Notes due in November 2022 (the 2022 Notes) under the related indenture at 102.313 percent of the principal amount. As of January 12, 2022, Teekay had $243.4 million total aggregate principal amount of the 2022 Notes outstanding. The redemption is expected to be completed on January 14, 2022. In addition, on January 10, 2022, Teekay announced a cash tender offer for any and all of its outstanding 5.0 percent Convertible Senior Notes due in January 2023 (the 2023 Notes) at 102.0 percent of the principal amount. As of January 12, 2022, Teekay had $112.2 million total aggregate principal amount of the 2023 Notes outstanding. The cash tender is expected to be completed in February 2022.

“Teekay’s operating franchise and industry-leading capabilities have been developed over our nearly 50-year history as a leader in the constantly evolving energy and transportation sectors. We believe the significant financial strength we now have following this transaction puts us in an excellent position to pursue a range of attractive investment opportunities that leverage Teekay’s core competencies and institutional knowledge to create long-term shareholder value,” commented Kenneth Hvid, Teekay’s President and CEO. “Following the retirement of our debt, the main components of our balance sheet will consist of cash of approximately $325 million, equivalent to $3.20 per share alone; an economic interest in Teekay Tankers Ltd. of approximately 30 percent; and a profitable asset-lite marine services business in Australia. We are excited about the flexibility that this gives us as we see both positive fundamentals in the tanker sector and a growing demand for new transportation solutions that will enable the shift to a lower-carbon world.”

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