TORM Orders Four LR2 Vessels from Guangzhou

Danish shipping company TORM has signed a purchase agreement for four fuel-efficient LR2 newbuildings with Chinese shipbuilder Guangzhou Shipyard International (GSI)

The newbuildings are expected to be delivered in the period between the fourth quarter of 2017 and the second quarter of 2018.

The agreement includes the option to purchase up to six additional vessels within the LR2, LR1 or MR segment with expected delivery in 2018 and 2019.

“Given the market outlook, we see this as an attractive way to grow and renew our LR2 fleet at a favorable price,” says CEO Jacob Meldgaard.

The company expects to have a total CAPEX relating to the four firm vessels of approximately USD 200 million, including extra costs related to TORM’s design requirements and supervision. TORM said that it is currently discussing financing for the newbuildings with potential lenders.

The vessels, the company’s first ordering of newbuildings since 2008, will be constructed according to TORM’s specifications in order to optimize trading.

TORM already has 16 GSI vessels in the current fleet.

With this agreement, TORM has CAPEX commitments of USD 273 million covering the remaining CAPEX on TORM’s remaining three MR newbuildings, one second-hand MR vessel and the four new LR2 vessels. TORM has a liquidity position of approximately USD 280 million including available debt facilities of USD 97 million.

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