"We are very pleased to finalize the completion of the
restructuring that secures TORM deferral of bank debt, new
liquidity and substantial savings from the restructured time
charter book. With this comprehensive agreement TORM will resume
full focus on the daily operations and the cooperation with our
customers and other important stakeholders. The capital decrease
decided at the Annual General Meeting in April has been completed
as part of the restructuring, and simultaneously TORM has decided
to increase the share capital by converting USD 200 million of
debt. With the completion of the restructuring TORM has gained time
for a potential market improvement and to secure the future,
long-term capital structure," says Chairman of the Board N. E.
Nielsen.
"I am proud that our time charter partners and banks have shown
confidence in TORM. We remain committed to delivering best-in-class
performance on customers, quality and costs," says CEO Jacob
Meldgaard.
* * *
Technical completion of the restructuring
With reference to announcement no. 31 dated 2 October 2012, TORM
A/S is today finalizing the technical completion of the
restructuring with its banks and time charter partners which among
other things comprises:
- New USD 100 million working capital facility
- Alignment of key terms and conditions and financial covenants
across all existing debt facilities and adjustment of all
maturities on existing credit facilities
- Waiver and release of certain claims and unpaid roll-up amounts
owed to TORM's time charter partners. The permanent changes to the
time charter contracts will significantly reduce TORM's future time
charter commitments by aligning rates to market level or by
termination of a number of contracts with redelivery of
vessels
- Implementation of the share capital decrease and capital
increase and registration hereof with the Danish Business
Authority
- Transfer of vessels to separate legal entities in Denmark and
Singapore. All entities are ultimately owned by TORM A/S and
aligned with the individual loan facilities
- Payment of restructuring costs
If the difficult conditions in the tanker and bulk markets
during 2012 will continue to prevail for a longer period, the
Company anticipates to be in breach with the new financial
covenants during the course of 2013. However, in market conditions
where the most current pick-up in product tanker freight rates will
prove sustainable over the coming years, the Company will be in
compliance with its financial covenants and be able to service
interest and installment obligations on the bank debt as they
become due.
Following the completion of the restructuring the ownership
structure is expected to be as follows:
Shareholders Expected ownership share
Existing shareholders
Certain banks
Time charter partners
10.0%
72.8%
17.2%
Total 100.0%
The Danish Financial Supervisory Authority (DFSA) is expected to
be requested by the banks to issue an exemption from the Danish
mandatory takeover rules in line with the positive non-binding
statement from the DFSA on the exemption from the takeover rules
already obtained by the banks to satisfy the conditions under the
amended loan documentation.
Following the preparation and publication of a listing
prospectus the Company will apply to have the new shares admitted
to trading and official listing on NASDAQ OMX Copenhagen.
At a later stage, TORM will convene an Extraordinary General
Meeting with the purpose of adopting changes to the Articles of
Association, including certain minority protection rights as well
as electing new Board members.
TORM maintains a forecasted loss before tax of USD 350-380
million for the financial year 2012 excluding accounting effects of
the execution of the restructuring, further vessel sales and
potential impairment charges. TORM's third quarter report for 2012
will be published on 7 November 2012.
Capital decrease
At TORM's Annual General Meeting held on 23 April 2012 it was
decided to decrease the share capital of TORM by an amount of
nominally DKK 363,272,000 from nominally DKK 364,000,000 to
nominally DKK 728,000 by decreasing the nominal amount per share
(denomination) from DKK 5.00 to DKK 0.01 by transfer of the
reduction amount to a special reserve fund in accordance with
Section 188(1)(3) of the Danish Companies Act.
By publication of the decision to decrease the share capital of
TORM in the IT system of the Danish Business Authority on 23 April
2012, creditors of TORM were notified of the decision and given a
statutory four week creditor notice period that commenced on 23
April 2012 as set forth in Section 192(1) of the Danish Companies
Act. By the end of the statutory creditor notice period, TORM had
not received notice of any claims outside the ordinary course of
business which are not waived or settled in connection with the
completion of the restructuring.
As part of the transactions in connection with completion of the
restructuring the Board of Directors has today decided to complete
the capital decrease pursuant to the decision taken on TORM's
Annual General Meeting held on 23 April 2012. Following the
registration of the capital decrease with the Danish Business
Authority the registered share capital of the TORM will be
nominally DKK 728,000 corresponding to 72,800,000 shares of
nominally DKK 0.01.
Capital increase
At TORM's Annual General Meeting held on 23 April 2012 the Board
of Directors was authorized to increase the share capital of TORM
by up to a nominal value of DKK 2,400,000,000 by payment in cash,
conversion of debt or contribution of assets other than cash
without proportionate pre-emptive subscription rights for the
existing shareholders at a rate discounted to the market price, as
per article 2.14 of the Articles of Association.
As part of the completion of the transactions pursuant to the
Restructuring Agreement the Board of Directors has today,
subsequently to the decision to decrease the share capital as
described above, decided to exercise the authorization in article
2.14 of the Articles of Association to increase the share capital
of TORM by a nominal value of DKK 6,552,000 by issuance of
655,200,000 shares of a nominal value of DKK 0.01 each.
The capital increase comprises a directed issue of new shares by
conversion of debt of totally DKK 1,174,100,581 (approximately USD
200 million) pursuant to the terms of the Restructuring Agreement
and related agreements to TORM's banks and time charter partners or
their assignees.
The capital increase is fully subscribed by TORM's banks and
time charter partners or their assignees for the aggregate of
655,200,000 new shares of a nominal value of DKK 0.01 each, at a
subscription price of DKK 1.79 per share of DKK nominal value 0.01
each (approximately USD 0.31 per share). The new shares issued
correspond to 90% of TORM's registered share capital and votes
following the registration of the capital increase with the Danish
Business Authority.
The same rights apply to new shares as to the existing shares,
including that the new shares are negotiable instruments and that
no restrictions under Danish corporate law apply to the
transferability of the new shares. However, the new shareholders
are responsible for compliance with local securities laws including
applicable transfer restrictions for deposit of new shares in
exchange for American Depository Shares ("ADSs") listed on NASDAQ
Capital Market under TORM's ADS program. TORM's existing option
programs will be adjusted to reflect the capital increase, but the
exercise prices remain significantly above current share price.
Following the registration of the capital increase with the
Danish Business Authority the registered share capital of TORM will
be nominally DKK 7,280,000 corresponding to 728,000,000 shares of
nominally DKK 0.01.
The new shares will be issued in the temporary ISIN code
DK0060443877. The new shares will not be admitted for trading and
official listing on NASDAQ OMX Copenhagen under the temporary ISIN
code. TORM expects to apply to have the new shares admitted to
trading and official listing on
NASDAQ OMX Copenhagen within 90 days from completion of the
Restructuring Agreement following the preparation and publication
of a listing prospectus after which it is expected that the ISIN
code of the new shares will be merged with the ISIN code of the
existing shares DK0060082915.
As a result of the capital decrease and the capital increase
certain amendments have been made to TORM's Articles of Association
which will be made available on the Company's website upon
registration with the Danish Business Authority.
Contact TORM A/S
N. E. Nielsen, Chairman, tel.: +45 4243 3343
Jacob Meldgaard, CEO, tel.: +45 3917 9200
Roland M. Andersen, CFO, tel.: +45 3917 9200
C. Sogaard-Christensen, IR, tel.: +45 3076 1288
Tuborg Havnevej 18
DK-2900 Hellerup, Denmark
Tel.: +45 3917 9200 / Fax: +45 3917 9393
www.torm.com
About TORM
TORM is one of the world's leading carriers of refined oil
products as well as a significant player in the dry bulk market.
The Company operates a fleet of approximately 120 modern vessels in
cooperation with other respected shipping companies sharing TORM's
commitment to safety, environmental responsibility and customer
service.
TORM was founded in 1889. The Company conducts business
worldwide and is headquartered in Copenhagen, Denmark. TORM's
shares are listed on NASDAQ OMX
Copenhagen (ticker: TORM) and on NASDAQ in New York (ticker:
TRMD). For further information, please visit www.torm.com.
Safe Harbor statements as to the future
Matters discussed in this release may constitute forward-looking
statements and may be more detailed than regular practice.
Forward-looking statements reflect our current views with respect
to future events and financial performance and may include
statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and statements
other than statements of historical facts. The forward-looking
statements in this release are based upon various assumptions, many
of which are based, in turn, upon further assumptions, including
without limitation, management's examination of historical
operating trends, data contained in our records and other data
available from third parties. Although TORM believes that these
assumptions were reasonable when made, because these assumptions
are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond our control, TORM cannot guarantee that it will achieve or
accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results
to differ materially from those discussed in the forward- looking
statements include the conclusion of definitive waiver documents
with our lenders, the strength of the world economy and currencies,
changes in charter hire rates and vessel values, changes in demand
for "tonne miles" of oil carried by oil tankers, the effect of
changes in OPEC's petroleum production levels and worldwide oil
consumption and storage, changes in demand that may affect
attitudes of time charterers to scheduled and unscheduled
dry-docking, changes in TORM's operating expenses, including bunker
prices, dry-docking and insurance costs, changes in the regulation
of shipping operations, including requirements for double hull
tankers or actions taken by regulatory authorities, potential
liability from pending or future litigation, domestic and
international political conditions, potential disruption of
shipping routes due to accidents and political events or acts by
terrorists.
Risks and uncertainties are further described in reports filed
by TORM with the US Securities and Exchange Commission, including
the TORM Annual Report on Form 20-F and its reports on Form
6-K.
Forward-looking statements are based on management's current
evaluation, and TORM is only under an obligation to update and
change the listed expectations to the extent required by law.
Attachments:
No. 32 2012 - TORM is today finalizing the technical completion
of its restructuring.pdf