TORM negotiating investment proposals from two international groups

By Caroline Salls

Pittsburgh, March 27 - TORM A/S said two international groups of investors have submitted specific, conditional proposals to inject $100 million to $200 million in equity and cash initiatives as part of the company's capital raising process, according to a news release.

"A very important step has been taken, and the risk of an in-court solution in Denmark or anywhere else will be eliminated if and when the conditions of these proposals have been fulfilled," TORM chairman of the board N.E. Nielsen said in the release.

TORM said it has entered into final negotiations with the potential investors. The negotiations will involve a decrease of the company's existing share capital, while granting existing shareholders the opportunity to subscribe for new shares.

According to the release, other stakeholders, including the banks and time charter partners, may also be offered the opportunity to become shareholders.

The company said it has cooperated closely with its banks, time charter partners, shareholders and other stakeholders to establish a basis for TORM to continue.

As part of that process, TORM said it has conducted a capital raising process to explore different alternatives for strengthening the balance sheet.

The company said its standstill agreement with all of its banks expired on March 15, but the close cooperation between TORM and the banks continues.

Under the structure of the investment proposals, TORM is to be granted a standstill period, but the banks can expect to receive full settlement of their outstanding loans.

The company said it has also implemented a significant reduction of costs and has now planned further cash and cost improving initiatives over the coming three years.

In addition, TORM has discontinued its new building program, and, as a result, there are no new vessels to be financed.

The company expects its annual general meeting to be held on April 23.

TORM is a Copenhagen-based carrier of refined oil products and is involved in the dry bulk market.

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