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Board Of Directors' Report At TORM's Extraordinary General Meeting On 9 January 2013

Content of the restructuring agreement - Chartered-in tonnage

As part of the restructuring agreement, the time charter partners have accepted that the existing time charter contracts will either be permanently changed and rates will be aligned to market level with upside/downside split or allow for termination of the contracts with return of vessels. These amendments will result in a significant reduction of the Company's future time charter commitments. TORM estimates that the changes in time charter contracts correspond to a total positive nominal mark-to-market impact on TORM of approximately USD 270 million. A small number of owners of chartered-in tonnage do not take part in the restructuring. As part of the restructuring, TORM will return 22 vessels to the time charter partners ahead of the original contract schedule.

Effective from 5 November 2012, the date of the restructuring, TORM's future time charter commitments were reduced by approximately USD 590 million, from USD 818 million to USD 228 million, due to the freight rates being aligned to market level, as mentioned, or by redelivery of the vessels.

As a result of the agreement, the Tanker Division has reduced the expected average time charter costs for the first quarter 2013 from USD/day 18,848 to USD/day 12,141, equal to a 36% reduction.

In the same period, the Bulk Division will reduce the average time charter costs from USD/day 16,286 to USD/day 13,755, equal to a 16% reduction.

Overall, the restructuring agreement has provided TORM with a moratorium on its bank debt and new liquidity, and it has reduced the time charter costs to the prevailing market level, against the banks and the time charter partners becoming shareholders of TORM holding an aggregate of 90% of the shares.

New ownership structure as a result of the restructuring agreement

The receivable that the time charter partners were given as a consequence of the amended contractual conditions as well as a fee to the banks, estimated at a total net present value of USD 200 million, has been converted into shares in the Company, corresponding to 90% of the Company. In this way, the existing shareholders retained an ownership interest of 10.0% against the 7.5% announced at the Annual General Meeting held in April 2012. The equity allocation between the banks and the time charter partners has been agreed between them and is part of the restructuring agreement.

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