TORM Deal All But Concluded

Signatures needed from 3 of 5 banks

Beleaguered shipping company TORM is on the verge of announcing the completion of its long running financial restructuring plan, ShippingWatch reports.

Under the deal, it is understood that Oaktree Capital Management will become controlling shareholders of the recapitalised company.

TORM's debt will be reduced from around $1.4 billion at present to $850 million.

Current Chairman Flemming Ipsen said the board now has a "locked text" agreement which carries the support of a sufficient quorum of debt holders.

On Friday, legal formalities such as signatures and documentation were said to be outstanding from three of five banks keeping TORM from announcing the new deal.

"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," said Ipsen.

"I have a hard time seeing how this could fail to happen."

According to the report, the announcement is expected in the coming weeks.

Ipsen and the board were appointed by TORM's lenders in 2013 to devise and manage an agreement over the future of the shipper whose debt position is understood to have been unsustainable, but the new owners are likely to put a new management team in place, he said.

"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," said Ipsen.

"And of course the new shareholders will probably appoint their own people in a future situation, which would not be strange at all."

In November, TORM announced non-compliance with one of its loan facilities after missing a deadline of November 20, 2014, for concluding the deal but it is understood lenders did not force a default as plans had been tabled and were still under negotiation.