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Torm obtains conditional postponement and agreement in principle

Torm has entered into a conditional agreement in principle on a long-term financial solution. If the agreement is finalised, the banks and the owners of the chartered tonnage is meant to obtain a considerable share in Torm. This means that the Greek major shareholder, Gabriel Panayotides, seems to be yesterday’s news in the crisis-stricken Torm.

Photo: LARS KRABBE

Torm announces that the company and the banking group’s coordination committee have agreed on a conditional postponement of payments of instalments and financial covenants on the existing ship financing until 30 April 2012. The agreement of postponement is expected to turn unconditional in the days to come. Moreover, Torm has entered into a conditional agreement in principle on a long-term financial solution with the banking groups’ coordination committee and the biggest owners of chartered tonnage. Among other things, the agreement is meant to make working capital available and ensure a considerable postponement of payments of instalments and financial covenants on the existing ship financing.

Torm says that the company has had a constructive dialogue with the owners of the chartered tonnage concerning a restructuring of the company’s contracts. The conditional agreement with the biggest owners of chartered tonnage will change the contracts permanently and adapt costs to the present market level or give room for annulment of contracts. The biggest owners of chartered tonnage will adapt the prices to the actual market level until 30 April 2012, while negotiations on the agreement are concluded.

The banks’ ownership

If negotiations are concluded, the banks and the owners of the chartered tonnage are meant to obtain considerable ownership of Torm as a result of the long-term financial solution. That is why it is expected that the new shares in Torm will lead to a considerable dilution of existing shareholders. The precise consequences for the existing shareholders will be presented as the final agreements are made. Among other things, the agreement is conditional on a conclusion of the basis for agreement and a final approval from all of the involved parties including the acceptance of the general meeting and it is subject to the continued duties of the board to act in the best interests of all the interested parties.

Controversial Torm owner saved by substantial bank agreement 

Torm silence on negotiation breakdown 

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