STOCKHOLM (Dow Jones)–Negotiations on a capital injection to save troubled Danish tanker and bulk vessel operator Torm A/S (TORM.KO) have collapsed, and its lenders are now likely to seek a restructuring of the company, the Financial Times reported on its website Sunday.
Torm announced last week that unnamed investors have submitted specific, conditional proposals to inject between $100 million and $200 million in equity and cash into the company, which is carrying $1.8 billion in interest-bearing debt, and has been pressured by plummeting freight rates amid overcapacity on the shipping market.
However, the FT said three people involved had confirmed to the paper that negotiations were fruitless and that Torm’s three biggest lenders–Danske Bank A/S (DANSKE.KO), Danish Ship Finance and Nordea AB (NDA.SK)–would now take charge.
FT added that the banks “are likely to seek a restructuring that avoids the time and expense of a formal bankruptcy procedure in Denmark or the U.S., where Torm is listed on Nasdaq.”
Newspaper Web site: www.ft.com
-By Niclas Rolander, Dow Jones Newswires