TORM orders two scrubber-fitted LR2 newbuildings

23 January 2020

“I am very pleased that TORM has utilized its long-term relationship with Guangzhou Shipyard International to enter into an agreement to purchase two LR2 newbuildings. These newbuildings will be financed through a flexible and attractive sale and leaseback structure including a repurchase option at the end of the lease period,” says Executive Director Jacob Meldgaard.

TORM has today entered into an agreement to purchase two scrubber-fitted and fuel-efficient LR2 newbuildings from Guangzhou Shipyard International (“GSI”) with expected delivery in the fourth quarter of 2021.

TORM has utilized its long-term relationship with state-owned GSI to secure the contract. TORM already has 29 GSI vessels in the current fleet and has excellent technical and commercial experience with these vessels. The vessels will be constructed according to TORM’s specifications in order to optimize trading and fuel- efficiency, and they will have scrubbers installed. The vessels will be prepared for a potential later dual-fuel installation.

TORM expects to have total CAPEX relating to the two vessels of USD 95m including extra costs related to TORM’s design requirements and scrubber installations. TORM has secured attractive financing of USD 76m with an international financial institution. The financing will be structured as a ten-year sale and leaseback agreement with purchase options during the lease period and at maturity providing TORM with maximum capital commitment flexibility.

TORM has since the publication of the third quarter results on 12 November 2019 entered into an agreement to sell an older Handy vessel, TORM Loire (built in 2004), for a consideration of USD 9m. The vessel was delivered to the new owner in late December 2019, and in connection with the transaction USD 4m of debt was repaid.

About TORM
TORM is one of the world’s leading carriers of refined oil products. 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. TORM’s shares are listed on NASDAQ Copenhagen and NASDAQ New York (tickers: TRMD A and TRMD). For further information, please visit www.torm.com.

TORM, press release