Hafnia has become the largest shareholder of the Danish oil products company Torm by purchasing an additional 4.5 million shares. This new investment, valued at $145.1 million, increases Hafnia's total stake in Torm to 18.22%.
Details of the Purchase and Share Price
Hafnia paid $32.25 per Torm share, which is the same price offered by OCM Njord Holdings for the sale of 9 million shares this week. This offering will generate approximately $290.3 million in revenue and is expected to conclude on September 16. Additionally, JPMorgan has a 30-day option to purchase another 1.35 million shares. In this transaction, Torm is not selling any shares and will not generate any revenue.
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Impact of the Purchase on Hafnia and Torm's Status
With this recent purchase, Hafnia has become the declared largest shareholder of Torm, bringing its total investment in the company to over $456 million. Last year, it purchased approximately 14.16 million Torm shares from OCM Njord at a price of $22 per share, totaling $311.4 million. However, until the transaction was completed, the issuance of new shares in Torm caused Hafnia's stake to drop below 14%.
Shipping analysts at SEB acknowledge that this recent purchase aligns with the pattern of a strategic owner accumulating shares as a financial investor. The bank referred to this behavior as "accumulation behavior" and stated that Hafnia's move to top the list of Torm shareholders keeps the discussion of accumulation alive, although the new purchase alone does not change ownership dynamics.
Hafnia also has sufficient balance sheet capacity for this transaction. The loan-to-net-asset ratio at the end of the second quarter was 13%, comfortably below the 20% threshold that allows for a 90% payout ratio in its dividend policy.
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