TORM Buys Resale MR Tankers from GSI

Danish ship owner TORM said it has purchased four resale medium range (MR) tankers from Chinese shipbuilder Guangzhou Shipyard International (GSI), with an option to purchase up to four additional MR vessels.

The first four vessels are due for delivery in 2019, and the following four would be delivered in late 2019 – all delivered according to TORM’s specifications.

According to TORM Executive Director, Jacob Meldgaard, TORM was able to purchase the vessels “at very favorable prices” thanks to its long-standing relationship with GSI.

“Given the market outlook, we see this as an attractive way to grow and renew our fleet at a cyclical good point in time,” Meldgaard said.

Danish Ship Finance has given “firm commitment” to finance 65 percent of the vessel purchase price, TORM said. The tranche will run for seven years from the time of delivery, and the deal’s main terms are in line with the company’s existing loan agreements.

TORM CFO, Christian SøgaardChristensen, said, “I see it as a demonstration of TORM’s strategic and financial flexibility that we are able to obtain attractive funding from an existing lender, Danish Ship Finance, in such a short time span.”

TORM presently has CAPEX commitments of $247 million covering the remaining CAPEX on its four LR2 vessels to be delivered in 2017 and 2018 and the four new MR vessels. With the new financing from Danish Ship Finance, TORM’s undrawn credit facilities and cash amount to approximately $468 million.