Torm chairman Flemming Ipsen took up the position in January 2013 with the set task of reaching a deal with the debt-stricken tanker carrier's large circle of lenders - and this task is now almost complete.
Along with the rest of the board, he has a "locked text" with a sufficient majority of debt holders backing the board. Now it is simply a question of legal procedures in relation to the necessary signatures and documentation among three of the five major banks that are keeping management at Torm from announcing an agreement.
This could happen sometime in the next few weeks with a corporate statement announcing a re-capitalization of Torm, Flemming Ipsen tells ShippingWatch after the Torm general assembly.
New board at Torm
"We still cannot announce an agreement, but the current status is that we have a locked text, which we need to have reconfirmed by some banks. I have a hard time seeing how this could fail to happen," says Flemming Ipsen, who with a final agreement will have completed his task as well as the task of the whole board as posed by the major banks including HSH, Danske Bank and Nordea with the major funds including Goldmann Sachs back in 2013.
With this, Flemming Ipsen is also preparing for the implementation of a new team for the board when the new shareholders take over, led by the controlling owner in the upcoming Torm construction, American equity fund Oaktree Capital Management.
"So we are in the position where we have a company with completely new shareholders, and both myself and the rest of the board were appointed by the original banks. And of course the new shareholders will probably appoint their own people in a future situation, which would not be strange at all," says Flemming Ipsen.
As reported by ShippingWatch on Wednesday, Torm will gain a market value of around USD 800 million and a fleet of 76 vessels in total with the new agreement, and thereby be resurrected as one of the largest product tanker carriers in the world with its own tonnage. For the controlling stake at Torm, Oaktree will supply the economic foundation through assets totaling 31 new ships, including six MR newbuildings which during 2015 will enter into Torm's balance. The carrier's debt will also be reduced from about USD 1.4 billion currently to about USD 850 million.
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