TORM Expands Fleet Amid Tanker Market Rebound and Red Sea Disruptions

Danish operator TORM is strategically positioning itself to capitalize on the strong rebound in the tanker markets, further boosted by disruptions in the Red Sea. The company is actively working to strengthen its position and continue market consolidation through aggressive deal-making, utilizing a unique structure that combines cash and stock to expand its fleet. With origins dating back to 1889, TORM is set to grow its fleet to 96 vessels by the end of 2024, solidifying its position as one of the world’s largest owners and operators of product tankers.

The latest acquisition involves the purchase of eight second-hand MR vessels, built between 2014-2015, with six of them equipped with scrubbers. The total consideration for the deal amounts to approximately $340 million, with delivery expected in the third and fourth quarters of 2024. TORM will finance $238 million of the acquisition through traditional bank financing, while the remaining portion will be covered by 2.65 million shares, valued at $34.74 per share.

TORM’s CEO, Jacob Meldgaard, expressed satisfaction with the share-based transaction, highlighting the company’s strategic approach to fleet expansion even before the product tankers market surged. In 2023, TORM acquired 22 newer eco vessels and divested 11 older vessels, with further acquisitions in the first quarter of 2024. The company’s strong performance is reflected in its forecasted earnings of $800 million to $1 billion for 2024, building on a historically high EBITDA of $848 million in 2023.

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