EMEA News
Torm Announces Non-Compliance with Loan Facility, No Default Expected
Beleagured Danish shipper Torm Friday announced that it was in non-compliance with one of the terms of its loan facilities, but said "such milestone default is not expected to be enforced whilst negotiations are on-going."
In August, Torm agreed an extension to its debt facilities until March 2015, subject to certain conditions, "milestones," relating to the ongoing restructuring of the group.
One such milestone was that a "restructuring and support agreement" be in place by November 20, 2014, but plans currently tabled are still to receive unanimous support from a Co-ordinating Committee of Lenders.
"TORM considers this as a consequence of the development in the restructuring process and does not expect this to have any immediate financial consequences," the company reported to the NASDAQ OMX Copenhagen.
The move is considered slightly out of the ordinary since listed companies are only obliged to report important events to the Excahnge, according to Shippingwatch.
According to the report, hedge funds that purchased some of Torm's debt from banks earlier this year are holding up the process in search of short term gains and were behind the company's announcement.
"The proposed transaction with Oaktree Capital Management is sought to be finalized no later than first quarter of 2015," said Torm, however.
Torm presented better than expected third quarter results earlier this month, though still posted a loss.
