Navigate this market better. Subscribe for FREE stock alerts and information.

Friday, February 24, 2012

Shipping firms face bank debt mutiny, (NASDAQ: TRMD)

Troubled shipping companies face the threat of seizures of their vessels as banks lose patience with an industry struggling with overcapacity and falling demand, industry players say.Banks have been fairly supportive until now, providing extensions such as last week's lifeline to Danish shipping company Torm A/S which was given a deferral on $1.8 billion of debt until March 1.But lenders are under pressure to cut their exposure to risky and dollar-denominated assets such as ship and trade finance to meet tougher capital rules."With all the other problems that many European banks have, and the tightening noose of regulatory and capital adequacy rules, they have no choice left other than to face their demons," said Nigel Prentis, head of research, consulting and advisory with HSBC Shipping Services Ltd.

TORM A/S is a Denmark-based shipping company engaged in the provision of integrated fright services to industrial customers. Shares of TRMD fell by 2.6% or $-0.02/share to $0.75. In the past year, the shares have traded as low as $0.54 and as high as $7.17. On average, 24848 shares of TRMD exchange hands on a given day and today's volume is recorded at 18700.