Product Tanker Giant Hafnia Launches Plan for Mega-Merger with Torm

World-leading product tanker company Hafnia has purchased a large block of shares in competitor Torm, and has signaled plans to pursue a mega-merger bringing together two leading fleets in the segment.

In dual statements, the companies said that Hafnia has acquired about 14 percent of Torm's issued share capital from Oaktree Capital Management, drawing on its own working capital and its lines of credit to make the purchase. The share purchase is large enough to give Hafnia consultation rights on the appointment of one representative on Torm's board. The closing conditions required the approval of regulators in Denmark and Brazil, and all conditions were satisfied before the purchase announcement, Hafnia said.

Hafnia says that it "believes consolidation is positive for the tanker industry generally and for the shareholders" of both companies, and it is looking at options for a combination of the two businesses. It plans on discussing possibilities for a merger with Torm's board.

Hafnia is the largest global operator of chemical and product tankers, and it moves crude and various products for blue chip oil majors. The energy shipping conglomerate BW Group holds a 44 percent controlling interest in Hafnia, along with BW's separate divisions for LNG, LPG, specialty gas, dry cargo, offshore wind and FPSO solutions.