Reuters – Indebted Danish shipping firm Nordic Tankers moved to split itself in two on Tuesday, agreeing to sell its chemical tankers arm in a bid to secure its future, while negotiating a loan repayment freeze for its remaining assets for another year.
Like many shipping firms, Nordic Tankers has suffered from a sector slump, now in its fourth year, caused by the global economic downturn and oversupply of vessels – a combination that has knocked freight rates to loss-making levels.
The company, facing the expiry of a previously agreed debt repayment freeze at the end of this month, said it had agreed to sell its chemical tanker business for $30 million to a company controlled by private equity firm Triton.
The business, which includes a fleet of nine owned vessels, six chartered vessels and about 70 vessels under commercial and pool management, will be combined with Herning shipping, a Danish chemical and products shipping firm also owned by Triton.
The new company will operate under the Nordic Tankers brand, with Nordic Tankers chief executive Tommy Thomsen at its helm.
“The combined company will become the leading global regional chemical tanker operator with a total fleet of more than 120 chemical tankers,” Triton said in a statement.
The remaining Nordic Tankers business, which will comprise a fleet of six product tankers in the range 37,000-73,000 deadweight tonnes, will be renamed Nordic Shipholding A/S.
As a result of the deal, Nordic Tankers’ creditors – Nordea and Danish Ship Finance – have agreed to extend a freeze on debt repayments for the product tankers business until the end of March 2013, the company said.
For the chemical tankers operation, two-thirds of the sale price will be lent back to the new company to help with its formation, it added.
Nordic Tankers’ reshaping comes as Danish shipping company Torm is locked in talks with 15 banks to find a solution to its $1.87 billion of debt, which has raised concerns about its ability to remain a going concern.
Losses caused by globally weak shipping markets and a plunge in its share price last year forced Torm to seek to delay repayment and put it in breach of its loan agreements.
“The period with very low and non-compensatory freight rates has regrettably lasted much longer than anticipated by most observers,” Nordic Tankers said in a statement.
At 0920 GMT, Nordic Tankers shares, which lost 64 percent of their value last year, were down 18 percent at 2.3 crowns, compared with a 0.2 percent rise on Copenhagen’s index of 20 most traded and most valuable Danish stocks.