SCHEDULE: Oaktree to Sell TORM Shares to Hafnia for $311M

OCM Njord Holdings, an Oaktree entity, has agreed to sell 14.16 million TORM Class A shares to Hafnia Limited for $311.4 million, pending regulatory approvals and other conditions.

Summary

• OCM Njord Holdings S.a r.l., an entity controlled by Oaktree Capital Management, has entered into a Sale and Purchase Agreement with Hafnia Limited.
• Under the agreement, OCM Njord will sell 14,156,061 Class A Shares of TORM plc to Hafnia.
• The sale price is $22.00 per share, totaling $311,433,342 in aggregate cash proceeds for OCM Njord.
• The closing of the transaction is anticipated to occur before February 11, 2026.
• The transaction is subject to several closing conditions, including regulatory approvals in Brazil and Denmark, and the appointment of an OCM Njord nominee as a director and chair of TORM's board.
• OCM Njord has provided undertakings regarding TORM's operations and corporate actions until closing, requiring Hafnia's consent for certain material changes.
• TORM plc is not a party to this agreement and has not made any commitments related to the purchase.
• As of the filing date, Oaktree entities beneficially own 40,581,120 Class A Shares, representing 41.43% of the outstanding shares.

Sentiment

Score: 7

Explanation: The filing details a significant share sale by a major investor, Oaktree, to another industry player, Hafnia. While it represents a partial exit for Oaktree, the transaction value is substantial, and the conditions suggest a structured and strategic move. For TORM, it signifies a change in its major shareholder base, potentially bringing new strategic direction or stability. The conditions for closing, while standard, introduce some uncertainty, but the overall tone is one of a planned, value-generating transaction for the selling party.

Positives

• Oaktree Capital Management is realizing significant cash proceeds of $311,433,342 from the sale of TORM shares.
• The transaction introduces Hafnia Limited as a significant shareholder, potentially bringing new strategic alignment or stability to TORM's ownership structure.

Negatives

• The sale by Oaktree will reduce its beneficial ownership in TORM plc, potentially signaling a partial exit strategy.
• The transaction is subject to multiple closing conditions, including regulatory approvals and board appointments, which could delay or prevent its completion.

Risks

• Failure to obtain regulatory approval in Brazil could prevent the closing of the share sale.
• Failure to obtain foreign direct investment authorization in Denmark could prevent the closing of the share sale.
• Non-fulfillment of the condition regarding the appointment of an OCM Njord nominee as a director and chair of TORM's board could prevent the closing.
• Approval or implementation of new material non-arm's-length transactions by TORM exceeding specified thresholds ($1,000,000 single, $5,000,000 aggregate) between the agreement date and closing could prevent the closing.
• Any failure to meet other applicable antitrust or foreign direct investment law requirements could prevent the closing.

Future Outlook

The closing of the share sale is expected to occur before February 11, 2026, contingent upon various conditions including regulatory approvals and the appointment of a new board chair for TORM. OCM Njord has also committed to certain operational restrictions for TORM until the closing.

Industry Context

This transaction involves two significant players in the tanker shipping industry. Oaktree Capital Management has been a long-term investor in TORM, and this partial divestment suggests a strategic portfolio adjustment. Hafnia Limited, also a prominent tanker company, increasing its stake (or becoming a new significant shareholder) in TORM could indicate consolidation trends or strategic partnerships within the sector, potentially aiming for greater market influence or operational synergies.

Comparison to Industry Standards

• The sale price of $22.00 per share for TORM Class A common shares can be compared to recent trading prices of TORM and valuation multiples (e.g., P/E, P/B, EV/EBITDA) of comparable tanker companies like Euronav, Frontline, or DHT Holdings to assess if the price reflects a premium or discount.
• The requirement for regulatory approvals in Brazil and Denmark is standard for significant cross-border transactions, especially in industries with strategic importance like shipping.
• The appointment of a nominee as director and chair of the board is a common governance condition in large block share sales, reflecting the buyer's desire for influence or control commensurate with their investment.

Management Changes

Corporate Governance

Related Party Transactions

• OCM Njord has undertaken to procure that no transactions or series of connected transactions with an aggregate value in excess of US$1,000,000.00 between the Issuer's group and OCM Njord's group are approved without Hafnia's consent, between the date of the Sale and Purchase Agreement and Closing.

Stakeholder Impact

• Shareholders: Existing TORM shareholders will see a significant change in the company's major ownership structure, with Oaktree reducing its stake and Hafnia becoming a key player. This could influence future strategic decisions and dividend policies.
• Management/Board: The appointment of a new board chair will impact the leadership and strategic direction of TORM.
• Employees: No direct impact on employees is mentioned, but changes in strategic direction from new major shareholders could have long-term implications.

Next Steps

• Closing of the Sale and Purchase Agreement, expected before February 11, 2026.
• Fulfillment of closing conditions, including regulatory approvals in Brazil and Denmark.
• Appointment of an OCM Njord nominee as a director and chair of TORM's board.

Key Dates

Recommendation

This filing details a significant block trade between two major entities, Oaktree and Hafnia, involving TORM shares. While Oaktree is reducing its stake, Hafnia is increasing its exposure or becoming a new significant shareholder. The transaction price of $22.00 per share provides a clear valuation point for a substantial portion of TORM's equity. For existing TORM shareholders, this event primarily represents a change in the major shareholder base and board leadership, which could bring new strategic direction. However, the immediate operational or financial performance of TORM is not directly impacted by this ownership change itself, and the transaction is still subject to closing conditions. Therefore, a "hold" recommendation is appropriate as investors should monitor the closing of the transaction and any subsequent strategic announcements from TORM or its new significant shareholder, Hafnia, before making further investment decisions. The price of $22.00 per share could serve as a reference point, but the market's reaction will depend on its perception of Hafnia's strategic intentions and the broader industry outlook.

Keywords

TORM plc, Hafnia Limited, Oaktree Capital Management, Share Sale, Schedule 13D/A, Tanker Shipping, Equity Transaction, Regulatory Approval, Board Appointment, Divestment