Torm in debt deal

Torm has struck a waiver with hedge funds and banks controlling debt of $1.6bn.

Copenhagen-listed Torm says the pact means it will not need to test for compliance on the facility at the end of the month.

A spokesperson for the Danish owner explains the waiver will run until the end of the third quarter when Torm will once again need to test for loan compliance.

He says the debt must be repaid at the end of 2016 in line with the restructuring deal struck in 2012. Only minor amortisation is required next year.

Today around 40% of the debt is controlled by approximately 60 hedge funds who repurchased the loans from five banks.

Torm last month said it expected to sign a waiver with its lenders.

Chief executive Jacob Meldgaard claimed at the time the fact much of Torm’s debt had been traded in the secondary loan market had not changed the dynamic of the loan talks.

“There is no difference in the negotiations,” he said. “Everybody has an objective and sometimes the hedge funds will have the same objective and sometimes they will have a different objective.”

“Torm continues the constructive dialogue with long-standing and new lenders regarding a long-term capital structure and expects them to remain supportive in this process,” a statement said today. 

Meldgaard said last month: “Even though the recapitalisation has been going on for a longer period, the first phase was about crating stability. In the second phase [after 2012] it has to do with strengthening the balance sheet.”