Chief executive happy to be on clear path after tweaking plan for US float.
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| Torm's Jacob Meldgaard Photo: Thomas Tolstrup |
The Danish tanker owner on Wednesday filed documents to add a listing on the Nasdaq in New York to its existing position on the Nasdaq Copenhagen.
The move to the US will add greater liquidity and open up the company to further investors, while providing a further currency for potential merger and acquisition transactions.
Financial sources explain Torm has strengthened its hand in such potions after opting for a technical listing rather than waiting in line for an IPO window that would have seen fresh equity raised.
No shipping company has successfully completed an initial public offering in the US since Gener8 Maritime in the summer of 2015 and Torm had paused while the shipping and capital markets stars attempted to align.
Jacob Meldgaard, executive director of Torm, today declined to discuss any specific growth ambitions but did say the shipowner “would look at all opportunities”.
“This market will benefit over time from larger structures and professional structures that can service clients in the best manner and tap into the funding and equity markets,” he added.
Taking control
Meldgaard says the company opted to go ahead with the listing without fresh shares being sold as the freight and capital markets were not aligning.“We took this opportunity to take it under our own control and have a listing,” he said. “I’m excited that we now have a clear path.”
Torm is the third largest products tanker owner in the world and will have a fleet of over 80 ships on the water by 2019 when its final newbuildings arrive.
Following today’s filing of Torm’s 20-F, it has a 15 day grace period and then its shares can begin trading in the US shortly after.
“When I look at that in combination with the fact we are seeing the underlying products tanker market has the potential to have the next take up pretty soon. That bodes quite well,” Meldgaard said.
US dominant investor base
The 20-F confirms Oaktree has a 63.5% stake in Torm, with DW Partners controlling a further 7.9%.Meldgaard says the between 75% and 80% of Torm’s investors are already US based.
Speaking to TradeWinds from Boston today, he said: “A listing here will enable them to trade in their own currency, during their own trading hours at their own stock exchange. It’s as simple as that.”
He added: “Over time, when we embark on a US listing it’s not because we want the current structure to remain intact.
“We want our capital structure to be something we actively work with and therefore the US listing is a piece in that puzzle over time to be active in the capital market.”
A 'more exciting' market
Torm announced the push to Times Square as it reported stronger than expected third quarter results today.At the same time it has adopted a more positive stance on the products tanker market given an accelerated draw on inventories in the period.
“In most of the largest consuming areas in the world, the inventory is now back at normalized levels,” Meldgaard said.
“We have said for some time that in order to have the opportunity for a market with more earning potential we need to see the inventories come down.
“The Q3 data is coming out and it demonstrates we are back to, or even in some cases below, the five-year averages.
“Now, as we come to the seasonally stronger market, there will be more arbitrage trades and more excitement in the freight markets.”
source: www.tradewinds.com