The basis of the Board of Directors' decision
Since September 2011, TORM has retained the assistance of the international, financial advisor Evercore Group LLC. In addition, the Board of Directors has obtained a valuation opinion letter from the international investment advisor Moelis & Company UK LLP and a preliminary valuation report from the accounting firm Ernst & Young PS with respect to the debt conversion and the issue of the new shares to be issued to the banks and the time charter partners in connection with the restructuring. The valuation report will be finally confirmed on the date of completion.
Having carefully considered the financial and operational position of the Company and the opinion letter from Moelis & Company UK LLP, it is the Board of Directors' assessment that it is in the best interests of the Company, its shareholders, creditors, other stakeholders and other interested parties to issue the new shares in the Company against conversion of the consideration of USD 200 million from time charter partners and banks to allow TORM to continue its operations without an in-court reconstruction or similar proceedings.
The issuance of the new shares will take place pursuant to an authorization granted to the Board of Directors at the Annual General Meeting on 23 April 2012. The Board of Directors was among others authorized to increase the share capital by issuance of new shares at a rate discounted to the market price against payment in cash, conversion of debt or contribution of assets other than cash without pre-emptive subscription rights.
Conditions and time plan
The technical completion of the restructuring is subject to certain conditions and terms including among others completion of loan documentation and documentation required for issuance of new shares and that no termination event has occurred including no occurrence of a material adverse change. In addition, the restructuring is subject to an exemption from the Danish mandatory takeover rules following completion of the restructuring. In this regard, the banks have obtained a positive nonbinding statement from the Danish Financial Supervisory Authority. The completion date is anticipated to take place within approximately four weeks. The exact date will be announced later.