Torm's major shareholder cancels share selling after price decline

The Torm share has increased steeply after Russia invaded Ukraine and thereby changed the trade patterns for the refined oil that Torm ships.
Photo: Pr / Torm
Photo: Pr / Torm
by Marketwire and ShippingWatch

Torm’s major shareholder, Oaktree Capital, has decided to abandon its plan of selling off a large stake in Torm at seller’s benefit.

Late Wednesday evening, Oaktree announced a sales offer of 5 million shares in Danish tanker carrier Torm. Further, there was an added option of purchasing another 750,000 shares from Oaktree within 30 days of the original transaction.

However, the share selloff failed, and there won’t be divested any shares at this moment in time, Torm comments in a press release.

”The termination results from an assessment by the selling shareholder [Torm] that current market conditions are not conducive to this offering on terms that would be in the best interests of the Selling Shareholder,” Torm writes.

The shares were put up for sale by OCM Njord Holdings, which is indirectly controlled by funds that are managed, in turn, by Oaktree Capital.

Oaktree’s stake in Torm is at about 65 percent.

Potential sale exceeding DKK 1bn

When the stake was put up for sale Wednesday evening, it was valued at DKK 1.1bn (USD 161m) based on Torm’s closing price. With inclusion of the optional, extra 750,000, the value for the stake was at DKK 1.3bn.

Thursday, Torm’s share value dropped by 14 percent to DKK 195.90. This meant that the value of the 5 million shares dropped to DKK 980m, or DKK 1.1bn with the optional extra shares.

The price decline was described as completely natural by Per Hansen, investment economist at Nordnet, as the market had to make room for more shares.

”An equity fund very rarely sells its own stakes. Today’s selloff is probably just the first of several,” Hansen wrote in a comment on Thursday prior to the sale being abandoned.

Since Oaktree has given up on finding a new home for its shareholding, the Torm share has reemerged at the US after market where the share increased by 7 percent compared to US closing price on Thursday, being traded at USD 30.51.

Converted to Friday morning’s USD rate at USD 1 to DKK 6.8290, that puts Torm’s share value at DKK 208.35.

5 million Torm shares amount to roughly 6 percent of the total share capital, while 5.75 million shares amount to circa 6.9 percent of said capital.

The Torm share increased markedly after Russia invaded Ukraine and thus changed the trade patterns for the refined oil that Torm sails with.

Despite Torm’s latest share price drop of 1.26 percent since year-end, the share value has increased by a soaring 259 percent over the past year.

English edit: Christian Radich Hoffman

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