Torm confirms sale and leaseback deals for six tankers

Torm said the sale and leaseback deals, expected to be executed during the third quarter, are to finance the purchase and to support the company’s capital structure.

The transaction with a Chinese counterpart is for four 2011-built MR tankers providing proceeds of $66m, including a purchase obligation in 2025.

Another two MR tankers are Torm Torino and Torm Titan, both 2016-built, providing total proceeds of $52m and in connection with the transaction $18m if existing debt will be repaid. The transactions are with two separate Japanese counterparts and include a purchase obligation in 2024 for Torm Torino and in 2026 for Torm Titan.

As of 30 June 2019, Torm’s orderbook stood at 11 vessels, including seven newbuildings – two LR1 and five MR vessels – and four MR secondhand vessels. The newbuildings are expected to be delivered in 2019 and the first quarter of 2020.

Jacob Meldgaard, executive director of Torm, said: “We believe the IMO 2020 regulation will drive increased demand for product tankers and that Torm is well positioned to take advantage of these new market dynamics.”

The implementation deadline for the IMO 2020 sulphur regulation is approaching, and the shipping industry has to comply with the new regulation either by reducing sulphur emissions with scrubbers or by using compliant fuels.

With close to half of the fleet being retrofitted with scrubbers and half of the fleet using compliant fuels, Torm believes it has a balanced approach to the new regulation.

The company said it has developed customised schedules for the vessels that will be using compliant fuels from 1 January 2020.

As of 15 August 2019, Torm has conducted six scrubber installations, and by 1 January 2020, 28 out of 34 scheduled installations are expected to be finalised, with the remaining six consisting of three newbuilding deliveries and three retrofit installations.

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