SCHEDULE: Oaktree Affiliate Sells 14.45% TORM Stake to Hafnia for $311M

OCM Njord Holdings, an Oaktree Capital Management affiliate, has agreed to sell 14.45% of TORM plc's Class A shares to Hafnia Limited for $311.4 million in cash.

Summary

• OCM Njord Holdings S.a r.l. (an Oaktree Capital Management affiliate) has entered into an Offer Letter to sell 14,156,061 Class A shares of TORM plc to Hafnia Limited.
• The sale shares represent approximately 14.45% of TORM plc's issued share capital.
• The agreed price is $22.00 per share, totaling $311,433,342 in aggregate cash proceeds for OCM Njord.
• Completion of the purchase is subject to several conditions, including the appointment of a single nominee proposed by OCM Njord (following consultation with Hafnia) as a director and chair of TORM's board.
• Other conditions include no material non-arm's length transactions by TORM prior to completion and the receipt of any mandatory antitrust or foreign investment control approvals.
• The parties are also seeking confirmation from the Panel on Takeovers and Mergers that Hafnia will not be considered 'acting in concert' with OCM Njord under the UK Takeover Code.
• OCM Njord and its affiliates currently beneficially own 40,581,120 Class A shares, representing 41.43% of TORM plc's Class A common stock as of June 4, 2025.
• Upon completion of the sale, OCM Njord's beneficial ownership in TORM plc will decrease by 14.45% of the issued share capital.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While OCM Njord is reducing its stake, it is doing so at a specific valuation, and Hafnia is making a strategic investment. The transaction introduces a new significant shareholder and potential board leadership change, which could be viewed as a positive for corporate governance and strategic direction, assuming the conditions are met smoothly.

Positives

• OCM Njord Holdings will receive significant cash proceeds of $311,433,342 from the sale of its TORM plc shares.
• Hafnia Limited will acquire a substantial 14.45% stake in TORM plc, potentially increasing its strategic influence in the tanker industry.
• The transaction includes a condition for the appointment of a new independent chair to TORM's board, which could enhance corporate governance and strategic direction.

Negatives

• OCM Njord Holdings is significantly reducing its stake in TORM plc, which could be interpreted as a partial divestment of its long-term commitment to the company.
• The transaction is subject to several conditions, including regulatory approvals and the execution of definitive documents, introducing uncertainty regarding its completion.

Risks

• The transaction is subject to the execution of definitive transaction documents, meaning no agreement is deemed to exist until these are signed.
• Completion is conditional upon the appointment of a single nominee as director and chair of TORM's board, which requires agreement between OCM Njord and Hafnia, and TORM's board approval.
• The purchase requires the receipt of any mandatory, suspensory antitrust or foreign investment control approvals, which could delay or prevent completion.
• Confirmation from the Panel on Takeovers and Mergers is required to ensure Hafnia is not considered 'acting in concert' with OCM Njord under the UK Takeover Code, and to avoid other adverse consequences.

Future Outlook

The parties intend to work towards agreeing definitive transaction documents as soon as practicable, with a target signing date of September 5, 2025, subject to receiving UK Takeover Code confirmations. Completion of the sale is contingent on several conditions, including regulatory approvals and the appointment of a new board chair for TORM plc.

Management Comments

• Hafnia Limited confirmed that the submission of the Offer and the consummation of the transaction has received preliminary internal and corporate approvals and is not subject to additional due diligence.
• Hafnia Limited confirmed having available funds, including drawing rights under existing credit facilities, to fund the purchase in full, and that completion is not conditional on financing.
• The parties agreed to cooperate to obtain confirmation from the Panel on Takeovers and Mergers regarding 'acting in concert' provisions under the UK Takeover Code.

Industry Context

This transaction represents a significant shift in the ownership structure of TORM plc, a prominent player in the tanker shipping industry. The entry of Hafnia Limited as a substantial shareholder, coupled with Oaktree's partial divestment, could signal strategic realignments within the sector, potentially influencing competitive dynamics and future consolidation efforts among tanker operators.

Comparison to Industry Standards

• NA This filing details a specific share sale transaction and change in beneficial ownership, rather than operational or financial performance metrics that would typically be compared to industry standards or global benchmarks. The valuation of $22.00 per share would require a broader market analysis of comparable tanker company valuations at the time of the offer, which is not provided within this filing.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders of TORM plc: Will see a significant change in the company's major shareholder base, with OCM Njord reducing its stake and Hafnia Limited becoming a new substantial holder. This could lead to shifts in strategic direction and board composition.
• OCM Njord Holdings S.a r.l.: Will receive substantial cash proceeds from the sale, allowing for capital redeployment.
• Hafnia Limited: Will gain a significant strategic stake in TORM plc, potentially increasing its influence and competitive position in the tanker market.
• TORM plc Board of Directors: Will undergo a change in leadership with the appointment of a new chair, potentially impacting board dynamics and decision-making.

Next Steps

• OCM Njord and Hafnia Limited will work towards agreeing and executing definitive transaction documents.
• The parties will cooperate to obtain confirmation from the Panel on Takeovers and Mergers regarding the UK Takeover Code.
• Hafnia Limited and OCM Njord will assess and obtain any required mandatory antitrust or foreign investment control approvals.
• A single nominee proposed by OCM Njord (following consultation with Hafnia) is expected to be appointed as a director and chair of TORM plc's board of directors, conditional on completion.

Key Dates

Keywords

TORM plc, Hafnia Limited, OCM Njord Holdings, Oaktree Capital Management, Share Sale, Tanker Shipping, SEC Filing, Schedule 13D, Strategic Investment, Corporate Governance, UK Takeover Code