Copenhagen-based TORM bought six MR resale ships for USD 185 million during the third quarter of 2017. The first transaction included four MR resale vessels from Guangzhou Shipyard, which are expected to be delivered in 2019, while the second transaction included two MR resale vessels from Hyundai Mipo.
These two vessels, TORM Sovereign and TORM Supreme, were delivered during Q3 this year. TORM said that it has secured financing for all six vessels. According to VesselsValue, the 50,000 dwt tankers were purchased from Hong Kong-based Cido Shipping at a price of USD 32.5 million apiece, and their current market value stands at USD 33.8 million.
Apart from the acquisitions, the company sold TORM Fox, a 2005-built Handysize vessel and entered into an agreement to sell TORM Rhone, a 2000-built Handysize vessel.
TORM revealed plans to file a registration statement with the U.S. Securities and Exchange Commission, in order to list its shares on the Nasdaq Stock Market in New York, which TORM expects to complete before the end of 2017.
“The purpose of a dual listing is to provide our investors with the ability to trade their Class A common shares on a USD-denominated exchange and to improve the liquidity in TORM’s Class A common shares over time,” the company said.
During Q3, 2017, TORM’s EBITDA was USD 37 million, down from USD 40 million reported in Q3, 2016. The company reported a loss of USD 4 million in Q3, 2017, which included an impairment of USD 3 million from a vessel held-for-sale.
Product tanker freight rates started out at weak levels in general, however, by the end of August the market began to recover. TORM said that the market improvement was driven by increased demand for transpacific voyages, resulting in average TCE earnings of USD 14,290 per day, for the company’s product tanker fleet.
“TORM believes that a dual listing will attract further investor interest and provide stronger visibility towards an international investor community, which will strengthen TORM’s strategic and financial flexibility. No new TORM securities will be issued in connection with the direct share listing on Nasdaq New York,” the company said.
“Towards the end of the quarter, the market was affected by the hurricane Harvey and refinery disruptions in Mexico which briefly lifted Atlantic MR rates and had an even more sustained effect on Far East MR rates with increasing transport distances towards the Americas. The disruption to the refinery system at the US Gulf Coast has accelerated the draws on inventories in the western markets bringing stocks closer to levels which can facilitate increased arbitrage trades,” TORM’s Executive Director Jacob Meldgaard said.
Apart from 72 self-owned product tankers, TORM had chartered-in five product tankers. The company has eight newbuildings on order, four LR2 vessels with expected delivery in the first half of 2018 and four MR resale vessels with expected delivery in 2019.
Sea News, November 15