TORM Plays Down Done Deal Talk by Danish Daily

TORM says its still at the negotiating table.

Troubled Danish shipping company A/S Dampskibsselskabet (TORM) has played down media reports that it is close to a deal with banks on a rescue plan, and only a little paperwork remains to be done.

"With reference to certain articles in the Danish media today, TORM would like to reiterate that negotiations are still proceeding with relevant stakeholders regarding a long-term, financial solution," the company said in a press release Thursday.

"The content of the negotiations is in line with the main principles communicated at the Annual General Meeting on 23 April 2012," it added, and that it will make a company announcement upon reaching an agreement.

The Danish refined oil products and dry-bulk tank operator has been in talks with 14 lenders to reorganise its $1.9 billion debt.
 
Danish daily newspaper Berlingske said Nordik banking group Nordea had played a key role in bringing TORM's foreign lenders to the table as the Export-Import Bank of China and Societe Generale had been reluctant to agree to the plan until now because they wanted to exit the shipping business altogether.

There were no details given with respect to the nature of the agreement with creditors who include Danske Banks and Danish Ship Finance. 

Reuters quoted TORM spokesman Jakob Risom as saying, "I cannot comment on it. We have said that we expect a deal to go through as soon as possible."

At the company's annual meeting in April, shareholders approved a preliminary deal that would leave existing shareholders with 7.5% of the company, while TORM's lenders and charter partners would convert their debts and own the other 92.5%.

TORM said in March it was negotiating with international investors for a proposed capital injection of $100 to $200 million in equity and was working closely with banks, time charter partners and other stakeholders to establish a basis for TORM to continue.

TORM joins many other shipping companies such as Japan's Sanko Steamship Co., Ltd. (Sanko Line) and Titan Petrochemicals Group Limited (Titan) trying to survive a slump in the shipping industry.

Shares of TORM lost 90% of their value last year and have been volatile at low levels in 2012.

It currently has a market capitalisation at about $33 million.