Torm cans product tanker order

Shipowner TORM has been forced to cancel one MR product tanker newbuilding, which was scheduled for delivery in March 2013. The parties have agreed not to disclose the terms.

“TORM has cancelled an MR newbuilding as part of the Company’s overall plan to preserve cash and delever the balance sheet. With this agreement TORM has remaining instalments on the newbuilding program of USD 126 million,” said chief financial officer Roland M. Andersen.

The effects of the transaction will be recognized in the financial statements in the fourth quarter of 2011 and lead to a P&L loss of approx. USD 13 million. It does not have any short-term cash impact. As a consequence, TORM has revised its forecast for the full year of 2011 from an expected loss before
tax of USD 175-195 million to an expected loss before tax of approx. USD 190-210 million.

Following the cancellation, TORM has three product tankers and two dry bulk vessels on order and an owned fleet consisting of 65.5 product tankers and two dry bulk vessels.