Torm agrees to debt restructuring
Troubled tanker operator Torm has agreed to a restructuring of its debt with group of its lenders led by Oaktree Capital Management, a major US investor, in a bid to safeguard its future.
Torm, one of the largest product tanker companies in the world, owns 43 tankers, two dry bulk vessels and operates 53 other vessels.
The company’s net interest-bearing debt currently runs into billions of kroner. It ordered a series of new vessels before the global economic downturn and was then crippled by falling freight rates.
“Oaktree would contribute product tanker vessels in exchange for a controlling equity stake in the combined company,” Oaktree said in a statement.
The restructuring will most likely stipulate that lenders write down the debt to the current asset values and then elect to convert part of the remaining debt into new equity in the company.