Torm Exits Sluggish Dry Bulk Market

By Ole Mikkelsen

COPENHAGEN, Sept 23 (Reuters) – Danish delivery firm Torm stated on Wednesday it will withdraw from the lacklustre dry bulk delivery market after promoting two vessels to an undisclosed purchaser and handing again one other leased bulker originally of October.

The sector, transporting commodities reminiscent of coal, timber and metal, has by no means totally recovered because the 2008 monetary disaster. Several dry bulk delivery corporations went bankrupt earlier this 12 months and the scrapping of ships has elevated.

Torm will proceed as a refined merchandise tanker firm.

Its exit from dry bulk marks one other step in a restoration plan after going by way of an extended debt restructuring course of. Funds managed by various funding agency Oaktree Capital Management management 62 p.c of Torm’s shares now.

The Copenhagen-based delivery firm saved its full-year revenue steerage of an earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) between $190 million and $230 million.

Until a number of years in the past Torm was one of many largest product tanker delivery firms on this planet and had massive ambitions, launching a takeover bid for rival compatriot D/S Norden , which additionally had dry bulk actions.

That takeover failed and Torm then borrowed closely for brand spanking new ships together with dry bulk vessels, earlier than the 2008 disaster took its toll and left it with money owed and redundant ships.

The firm has now 68 owned and 4 chartered product tanker vessels which carry refined merchandise reminiscent of gasoline, diesel oil and jet gas. At the tip of June its debt was $1.34 billion, eclipsing the e-book worth of its fleet.

By distinction, D/S Norden has managed to manoeuvre by way of the disaster a lot better and had at finish of June money and securities of $340 million and undrawn credit score amenities of $420 million.

Chief Executive Jan Rindbo from D/S Norden instructed Reuters earlier this week the corporate was dedicated to each the tanker and dry bulk enterprise going ahead though specializing in fewer vessel varieties.

Spot charges for dry bulk vessels are round $9,000 a day in comparison with charges as excessive as $200,000 a day earlier than the disaster for the biggest vessels. This is because of overcapacity and sluggish commerce progress.

(Reporting by Ole Mikkelsen; modifying by Sabina Zawadzki and Elaine Hardcastle)