Thursday’s Top Losers: Teekay Corporation (NYSE:TK), Teekay LNG Partners L.P. (NYSE:TGP), Teekay Offshore Partners L.P (NYSE:TOO)

Share of Teekay Corporation (NYSE:TK) dropped -59.18% and is at $7.14 in the Real-Time trading session. The company opened at $11.50 on Thursday, and is moving between $6.96 – $11.71, through the day.

Teekay Corporation (TK) declared that its Board of Directors has approved a plan to reduce the Companys quarterly dividend to $0.055 per share, down from $0.55 per share in the third quarter of 2015, commencing with the fourth quarter of 2015 dividend payable in February 2016. The reduction in the Companys dividend amount is in response to declaration by the general partners of Teekay Offshore Partners L.P. (Teekay Offshore) and Teekay LNG Partners L.P. (Teekay LNG) that they plan to reduce their respective quarterly cash distribution amounts. Teekay Offshore and Teekay LNG now expect to use a noteworthy portion of their internally generated cash flow to fund the equity capital requirements of their future profitable growth projects and reduce debt levels, eliminating their need to access the equity capital markets for the foreseeable future.

Teekay Corporation is committed to being a supportive Sponsor of our two master limited partnerships, commented Peter Evensen, Teekays President and Chief Executive Officer. Although it is painful in the short-term to have to temporarily reduce Teekay Corporations dividend, administration and our Board of Directors believe Teekay and its shareholders will achieve greater long-term value creation by focusing on enhancing the value of our ownership interests in Teekay Offshore and Teekay LNG and being in a better position to support their continued growth and distributable cash flow generation.

Teekay LNG Partners L.P. (NYSE:TGP) declined -48.53% right now and is at $9.46. The 52-week range of the share price is from $9.33 – $43.66. The company has total market capitalization of $1.45B.

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (TGP), has approved a plan to reduce its quarterly cash distributions to $0.14 per common unit, down from $0.70 per common unit in the third quarter of 2015, commencing with the fourth quarter of 2015 distribution payable in February 2016. The Partnership anticipates to use a noteworthy portion of its internally generated cash flow to fund equity capital requirements on its future profitable growth projects and reduce debt levels, eliminating the need to access the equity capital markets for the foreseeable future.

Mr. Evensen added This decision by administration and the Partnerships Board of Directors was not taken lightly. Numerous options were considered, counting selling existing assets and future growth projects, and evaluating potential alternative sources of capital, which could have resulted in permanent dilution to existing unitholders. Rather than take this course, we determined that temporarily reducing our cash distributions is the most reliable way to fund our future profitable growth projects with the lowest cost of capital. We believe this prudent approach will strengthen the Partnerships financial position, preserve our long-term growth potential, and will result in higher distributable cash flow per unit.

Shares of Teekay Offshore Partners L.P (NYSE:TOO), lost -48.72%, and is now trading at $4.00. Its overall volume is 6.91M shares right now, and average trading volume of 517,510.00 shares, after the company slashed its quarterly cash distribution.

The company cut its quarterly cash distribution to 11 cents per common share, down from 56 cents per common share for the 2015 third quarter.

The company is reducing its debt levels amid uncertainty regarding how long it will take for the energy and capital markets to normalize, Teekay said on Thursday. The companys cash flow remains stable and growing, CEO Peter Evensen said in a statement.

There is presently a dislocation in the capital markets relative to the stability of our businesses such that the partnerships cost of equity has raised to the point where it is presently not an economically attractive source of capital, Evensen continued.

Based in Bermuda, Teekay provides marine transportation, oil production, storage, towage and floating accommodation services to the offshore oil industry.

So far recently, 2.78 million shares of Teekay have traded, as contrast to its 30-day average of about 517,000 shares.


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