TORM to buy two LR2 newbuildings from GSI

23 January 2020 (Last Updated January 23rd, 2020 13:02)

Denmark-based shipping company TORM has signed an agreement with Guangzhou Shipyard International (GSI) to acquire two scrubber-fitted LR2 newbuildings.

Denmark-based shipping company TORM has signed an agreement with Guangzhou Shipyard International (GSI) to acquire two scrubber-fitted LR2 newbuildings.

The vessels are expected to be delivered by the fourth quarter of next year.

GSI has provided 29 vessels for TORM’s fleet. Apart from featuring scrubbers, the new vessels will adhere to the TORM specifications for optimising trading and fuel- efficiency.

The vessels will also have the provision for dual-fuel installation in the future.

The total capital expenditure for the two vessels is expected to be $95m, including additional costs for the design and scrubber installation.

The Danish company has secured a $76m infusion from an international financial institution.

The company signed a ten-year sale and leaseback agreement for the funding, which includes purchase options during the lease period and at maturity.

TORM executive director Jacob Meldgaard said: “I am very pleased that TORM has utilised its long-term relationship with Guangzhou Shipyard International to enter an agreement to purchase two LR2 newbuildings.

“These newbuildings will be financed through a flexible and attractive sale and leaseback structure, including a repurchase option at the end of the lease period.”

In March 2019, Torm partnered with Glencore subsidiary Inatech to develop the ‘Smart Trader’ app to tackle the anticipated complex bunkering landscape in shipping after 2020.

TORM also provided input on the app’s design.

In November 2018, TORM formed a new joint venture (JV) with ME Production and GSI to manufacture and install scrubbers on vessels in China.

Called ME Production China, the JV will provide scrubbers to both newbuild and retrofitted vessels.