COPENHAGEN (Reuters) - Debt-stricken Danish shipping company Torm A/S TORM.CO reported deepening losses for the second quarter on Tuesday and acknowledged that its survival depends on reaching a deal with its banks on its $1.9 billion of debt.
The tanker and dry-bulk operator has been in talks with 14 banks for months as it seeks a comprehensive financing solution to secure its future as a going concern.
Torm said that it was still working closely with its banks and fleet charter partners on a financing and restructuring plan, adding: “The completion of a restructuring agreement is a prerequisite for Torm’s continued operation.”
However, Chief Executive Jacob Meldgaard said in the statement that Torm had “full support for a final restructuring agreement from all involved parties”.
Torm had said on June 1 that it was close to agreeing a further extension of a freeze on its debt repayments, but last month announced that it would try to revert to the plan laid out at its annual shareholder meeting in April.
That plan would leave current owners, including Greek tycoon Gabriel Panayotides, with only 7.5 percent of the stock and Torm’s lenders and charter partners with 92.5 percent. Torm’s creditors include Danske Bank (DANSKE.CO), Nordea Bank (NDA.ST) and Danish Ship Finance.
Torm is one of several shipping companies fighting for survival in a sector slump now in its fourth year, caused by a weak global economy, oversupply of vessels and low freight rates.
The company’s pretax losses grew to $132.1 million in the second quarter, from $23.7 million in the same period last year.
Shares in Torm, which lost 90 percent of their value last year and have been volatile at low levels this year, traded up 3 percent by 0703 GMT, outperforming a flat Copenhagen bourse .OMXC20.
Reporting by Copenhagen newsroom; Editing by David Goodman