TORM Expands Fleet with Acquisition of Eight Vessels in a €340 Million Deal
In a significant expansion of its operational capacity, Danish tanker shipping company TORM has announced the acquisition of eight Medium Range (MR) vessels, enhancing its fleet to a total of 96 ships. This strategic move involved a comprehensive €340 million ($371 million) purchase agreement while simultaneously declaring the sale of another MR vessel from its existing fleet for $23.3 million.
The acquisition reflects TORM’s ongoing strategy to grow its maritime assets through carefully structured deals, emphasizing the importance of share-based transactions. CEO Jacob Meldgaard commented on the deal, stating, “We are pleased to once more announce a partially share-based transaction to acquire vessels. Since 2021, TORM has utilized partially share-based transactions to expand the fleet, even before the product tankers market took off.” He further noted the significance of this approach, underscoring the sellers’ confidence in TORM’s One TORM platform and their optimistic outlook on market fundamentals.
The financing structure of the purchase includes €238 million in cash, supported by traditional bank financing, and the issuance of at least 2.65 million shares. The vessels, constructed at Hyundai Mipo Dockyard in South Korea between 2014 and 2015, are equipped with advanced features, with six of them fitted with scrubbers. These ships are scheduled for delivery during the third and fourth quarters of 2024, marking a significant enhancement in TORM’s fleet operations.
The recent acquisition aligns with TORM’s historical strategy of including second-hand vessels to bolster its fleet. In 2023 alone, the company added seven 2011-2013 built LR1 vessels, underscoring its commitment to growth and operational efficiency. This approach is part of a broader strategy to navigate the transition towards decarbonization, as the maritime industry seeks to achieve net-zero emissions by 2050.
Lars Mathiasen, TORM’s head of commercial decarbonisation, elaborated on the company’s strategic vision, “We are trading our ships on a spot basis as the availability of fuels is, to us, simply too uncertain yet.” This statement reflects TORM’s cautious yet proactive stance on the evolving fuel landscape within the maritime sector. Mathiasen further highlighted the interim strategy, “That’s why we have taken this strategic path to heavily invest in short-term decarbonisation while we wait for some clarity on future fuels, prior to investing in new assets.”
The acquisition of these eight vessels not only enhances TORM’s operational capacity but also significantly positions the company for future growth. Through careful investment and strategic alignment with environmental goals, TORM continues to set a precedent in the maritime industry for both expansion and sustainability.
