Oaktree Capital Management LP and Hafnia Ltd have progressed a recently announced preliminary agreement into a binding one for Hafnia’s purchase of around 14.1 million TORM PLC shares held by Oaktree Capital for $311.43 million, or $22 per share.
“Upon completion Hafnia will hold approximately 14.45 percent of issued share capital in TORM”, Hafnia, part of Singapore-based BW Group, said in a statement on its website.
Hafnia and TORM own fleets that ship crude, oil products and chemicals. Hafnia says it owns about 200 vessels. TORM says it owns over 80 vessels.
Hafnia trades on the Oslo Stock Exchange and the New York Stock Exchange while TORM is listed on the Copenhagen Stock Exchange and Nasdaq in New York.
Oaktree Capital meanwhile is a Los Angeles-based investor.
The statement clarified, “Following market reports referring to the possibility of a business combination on a net asset value basis, Hafnia agrees that it is to the benefit of shareholders in both companies to explore such strategic opportunities. However, discussions have yet to take place and there can be no assurance that this will lead to any transaction”.
The transaction is subject to customary conditions including regulatory approvals and the appointment of a new independent board chair for TORM, Hafnia said.
TORM said September 3, when Hafnia announced the preliminary deal, “TORM has not been involved in the transaction”.
Strong Demand
For the second quarter Hafnia earlier reported $346.56 million in operating revenue, down from $563.1 million for 2Q 2024. Operating profit was $83.09 million, down from $262.14 million for 2Q 2024. Profit before income tax landed at $78 million, down from $260.77 million. Net profit was $75.34 million, or $0.15 per share – down from $259.2 million.
“Strong product demand, low global inventories, improving refining margins and high export volumes have gradually supported the second quarter product tanker market and have continued into the third quarter”, Hafnia said August 27.
“Refined product volumes on water have steadily increased, and daily loadings of refined products have grown even more in the third quarter, signaling further strength in the market as we approach the peak earning season.
“Underlying demand remains strong, with the IEA forecasting a 0.7 million barrel per day increase in global oil demand in 2025 to 103.7 million barrels per day. OPEC+ plans to boost production by 0.5 million barrels per day in September, supporting near-term crude tanker rates and benefiting the product tanker market through higher refinery throughput and exports.
“Global product inventories have fallen below historical averages, with continued drawdowns in both Europe and the US. The ongoing closure of refineries in these regions is expected to further tighten diesel and jet fuel supply, with replacement barrels likely supplied from the Middle East Gulf, adding to product tonne-miles. Refining margins are trending higher, with low refinery maintenance activity expected in the third quarter; these indicators point toward sustained strong oil demand.
“The outlook for the product tanker supply remains positive, with limited newbuild activity planned for 2025. As of August 2025, the product tanker orderbook-to-fleet ratio is about 20 percent, but vessel scrapping has started, supported by an aging fleet, as many vessels built in the early 2000s are now reaching scrapping age.
“Additionally, vessels built in the latter part of the 2000s are nearing the end of their primary trading life. Furthermore, the capacity from newbuild deliveries has been absorbed by a large number of LR2s and LR1s entering the dirty trade.
“The recent EU sanction package on Russia has further tightened the tanker supply effectively, by potentially pushing more vessels into the shadow fleet. By Q3 2025, a total of approximately 800 tankers have been sanctioned.
“The ban on products refined from Russian crude oil would also contribute to market inefficiencies, expand trade routes, and increase tonne-miles.
“Looking ahead to the rest of 2025, we believe the product market is well-positioned for a strong winter season.
“However, several key factors could influence market dynamics, such as trade policy developments, changes in oil trade routes, sanctions, and ongoing geopolitical tensions”.
To contact the author, email jov.onsat@rigzone.com
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