Torm Seeks Reduction in Capital Expenditures, Cancels Newbuild of Product Tanker

torm Danish shipping company Torm A/S (TORM.KO) has entered into an agreement to cancel one medium range (MR) product tanker newbuilding, which was scheduled for delivery in the second quarter of 2014. The parties have agreed not to disclose the terms.

“With this agreement, Torm’s order book is empty. A substantial reduction in CAPEX commitments has been a key element towards the Company’s long-term financial solution,” says CFO Roland M. Andersen

The effects of the transaction will be recognized in the financial statements in the first quarter of 2012 and lead to a P&L loss of approx. USD $2 million. It does not have any short-term cash impact.

Following the cancellation, TORM’s owned fleet consists of 66 product tankers and 2 dry bulk vessels.  Torm no longer has any newbuildings on order.