TORM Buys Six MR Resale Tankers

Copenhagen-based shipping company TORM purchased six MR resale vessels for a total of USD 185 million during the third quarter of this year.

As informed, the first transaction included four MR resale vessels from Guangzhou Shipyard International Company Limited (GSI) with expected delivery in 2019. The second transaction included two MR resale vessels from Hyundai Mipo.

These two vessels, TORM Sovereign and TORM Supreme, were delivered during the third quarter of 2017.

The second transaction was reported earlier by World Maritime News as a brokers report.

Each featuring 50,000 dwt, the tankers were purchased from Hong Kong-based Cido Shipping at a price of USD 32.5 million apiece, and their current market value stands at USD 33.8 million, data provided by VesselsValue shows.

TORM said that it has secured financing for all six vessels.

In addition to the vessel acquisitions, TORM has sold TORM Fox, a 2005-built Handysize vessel.

Following the balance sheet date, TORM has also entered into an agreement to sell TORM Rhone, a 2000-built Handysize vessel. The vessel is expected to be delivered to the new owner in Q4 2017/Q1 2018.

In a separate announcement, TORM revealed plans to file a registration statement with the U.S. Securities and Exchange Commission later today in order to list its shares on the Nasdaq Stock Market in New York, which TORM expects to complete before the end of 2017.

Following the listing, TORM’s Class A common shares will be listed for trading on both Nasdaq Copenhagen under the symbol “TRMD A” and Nasdaq New York under the symbol “TRMD”.

“The purpose of a dual listing is to provide our investors with the ability to trade their Class A common shares on a USD-denominated exchange and to improve the liquidity in TORM’s Class A common shares over time,” the company said.

“TORM believes that a dual listing will attract further investor interest and provide stronger visibility towards an international investor community, which will strengthen TORM’s strategic and financial flexibility. No new TORM securities will be issued in connection with the direct share listing on Nasdaq New York.”

During the third quarter of this year, TORM’s EBITDA was USD 37 million, down from last year’s USD 40 million reported in Q3. The result before tax for the third quarter of 2017 was a loss of USD 4 million, which included an impairment of USD 3 million from a vessel held-for-sale.

Product tanker freight rates started out at weak levels in general; however, by the end of August the market began to recover. TORM explained that the market improvement was mainly driven by increased demand for transpacific voyages, resulting in average TCE earnings of USD/day 14,290 for the company’s product tanker fleet.

“Towards the end of the quarter, the market was affected by the hurricane Harvey and refinery disruptions in Mexico which briefly lifted Atlantic MR rates and had an even more sustained effect on Far East MR rates with increasing transport distances towards the Americas. The disruption to the refinery system at the US Gulf Coast has accelerated the draws on inventories in the western markets bringing stocks closer to levels which can facilitate increased arbitrage trades,” TORM’s Executive Director Jacob Meldgaard said.

In addition to the 72 owned product tankers, TORM had chartered-in five product tankers. The company has eight newbuildings on order: four LR2 vessels with expected delivery in the first half of 2018 and four MR resale vessels with expected delivery in 2019.

 

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