COPENHAGEN, April 22 Indebted Danish shipping company Torm A/S proposed on Sunday to slash the nominal value of its stock to pave the way for a new issue of equity.
Form said that the proposal to reduce the nominal value of its shares to 0.01 Danish crowns per share from 5.00 per share was necessary because Danish corporate law prevents it from issuing new shares below nominal value.
Cutting the nominal value of the stock would result in a reduction of Torm's share capital from nominally 364.0 million Danish crowns ($64.63 million) to nominally 728,000 crowns, corresponding to 0.2 percent of the nominal share capital, by transfer of the reduction amount to a special reserve fund, the company said.
"The proposal is motivated by the need to create flexibility for a potential equity issue as part of the company's plan for a long-term, comprehensive financing solution," Torm said in the statement.
The proposal needs support from at least two-thirds of the votes cast as well as of the share capital represented at the annual general meeting on Monday, April 23, it said.
Torm also said that its chairman, N. E. Nielsen, had received proxy from Torm's main owners to vote their stock at the shareholders' meeting so he would control 52.2 percent of the share capital's total voting rights and the total share capital of the company at the meeting. ($1 = 5.6320 Danish crowns) (Reporting by John Acher)