As previously reported, TORM has obtained the creditor consents necessary to implement its Restructuring through an English law Scheme of Arrangement (cf. announcement no. 15 of 25 June 2015). The Scheme has now been sanctioned by the High Court of England and Wales and the sanction order has today been lodged with the Companies House. The Scheme has thus become effective.
Disclosures pursuant to the Restructuring Agreement
Earlier this year, TORM entered into a Restructuring Agreement to memorialize the support of certain of its lenders for the Restructuring (cf. announcement no. 8 of 27 March 2015). As required by TORM’s finance documents and in connection with negotiations regarding the Restructuring Agreement, TORM provided its lenders certain confidential information concerning TORM, including weekly cash flow projections and a February 2015 liquidity analysis. In addition, certain documents produced by the Company for the Scheme of Arrangement are non-public. The information posted on the Company’s investor website referenced herein is being furnished to satisfy the Company’s public disclosure obligations of all material information under the Restructuring Agreement.
Explanatory Statement and Scheme Terms
In connection with the Scheme of Arrangement process, TORM has produced an “Explanatory Statement”, dated 9 June 2015, which sets forth a summary of the material terms of the Scheme of Arrangement and the ancillary agreements related thereto. The Explanatory Statement amongst other things contains a liquidation analysis, which states that in a forced sale liquidation under Danish law, the net shortfall for the Scheme Creditors with outstanding amounts under the Existing Facilities of USD 1,418m is estimated to be approximately USD 600m.
The Explanatory Statement and the detailed Scheme Terms have now been made public on TORM’s website at http://www.torm.com/investors/RA-disclosures.
Liquidity analysis dated 6 February 2015
As part of the restructuring negotiations, TORM was asked to make a liquidity analysis based on certain agreed assumptions as per 6 February 2015. This information is only being released in connection with TORM’s disclosure obligations under the Restructuring Agreement and the information does not necessarily reflect TORM’s current view of its financial projections or prospects.
The liquidity analysis dated 6 February 2015 is attached to the announcement and can also be found on http://www.torm.com/investors/RA-disclosures.
Estimate for the first half year of 2015
TORM estimates a positive EBITDA of USD 95-100m and a profit before tax of USD 5-10m for the six months ended 30 June 2015.
At the completion of the Restructuring, TORM will provide full-year guidance. The Restructuring will be accounted for as a reverse acquisition in accordance with IFRS 3, “Business combinations”, which means that for financial reporting purposes, Oaktree Capital Management via OCM (Gibraltar) Njord Midco Ltd. (“Njord”) and its subsidiaries is considered to be the accounting acquirer and as such, the continuing reporting entity. Consequently, the prospective consolidated financial information for the full year 2015 will reflect the activities of Njord only during the period from 1 January 2015 and until completion of the Restructuring, whereas the period from completion of the Restructuring and until 31 December 2015 will reflect the combined activity of TORM and Njord.
As of 30 June 2015, TORM’s available liquidity was cash and cash equivalents of USD 89m. With the current freight rate environment and taking into account the completion of the Restructuring, TORM expects to remain cash generative at the operating level during the remainder of 2015. In addition, TORM will obtain a new Working Capital Facility of USD 75m upon completion of the Restructuring Agreement.
The estimates provided above and on TORM’s website have been prepared by TORM’s management. These estimates are based upon a number of assumptions, including freight rates, earning days, charter costs, operating expenses and administrative expenses. Any differences among these assumptions and TORM’s actual experiences may result in actual results in future periods significantly differing from management’s current estimates. The projections set forth above and on TORM’s websites are management estimates and are not guarantees of future performance. Factors outside of TORM’s control may cause actual results to be materially lower than these projections. There can be no assurance that any of the assumptions will reflect actual performance. You should read the above information together with the historical financial information included in the Explanatory Statement and in past Annual Reports, located on TORM’s website at http://www.torm.com/investors/financial-reports.
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TORM expects the completion of the Restructuring to occur on or around 13 July 2015.
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Contact TORM A/S Flemming Ipsen, Chairman, tel.: +45 3917 9200 Jacob Meldgaard, CEO, tel.: +45 3917 9200 Mads Peter Zacho, CFO, tel.: +45 3917 9200 Christian Søgaard-Christensen, IR, tel.: +45 3076 1288 |
Tuborg Havnevej 18 DK-2900 Hellerup, Denmark Tel.: +45 3917 9200 / Fax: +45 3917 9393 www.torm.com |
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About TORM TORM is one of the world’s leading carriers of refined oil products as well as a player in the dry bulk market. The Company operates a fleet of approximately 80 modern vessels with a strong commitment to safety, environmental responsibility and customer service. TORM was founded in 1889. The Company conducts business worldwide and is headquartered in Copenhagen, Denmark. TORM’s shares are listed on NASDAQ OMX Copenhagen (ticker: TORM). For further information, please visit www.torm.com. |
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Safe Harbor statements as to the future Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and statements other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot guarantee that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward- looking statements include the strength of the world economy and currencies, changes in charter hire rates and vessel values, changes in demand for “ton miles” of oil carried by oil tankers, the effect of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in TORM’s operating expenses, including bunker prices, dry-docking and insurance costs, changes in the regulation of shipping operations, including requirements for double hull tankers or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents, political events or acts by terrorists. Forward-looking statements are based on management’s current evaluation, and TORM is only under an obligation to update and change the listed expectations to the extent required by law. |
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