SAN FRANCISCO (MarketWatch) � Investors bailed from Overseas Shipholding Group Inc. Friday, sending the company�s shares down as much as 15% after management halted its first-quarter dividend payment of 22 cents a share.
Overseas Shipholding OSG �said it�s conserving cash to weather a challenging global economic environment that�s hurt shippers. The industry�s coping with lower average spot rates, too many new ships built when bank credit was cheap that are now outstripping demand, and higher fuel prices.
The Baltic Dry Index, which tracks worldwide shipping rates for dry-bulk cargoes in four vessel classes, is down 60% since Jan. 1 and now plumbing lows last seen early in 2009, when global trade seized up in the wake of the U.S. financial meltdown. Read story on global shipping rates.
Read Asian shipping stocks headed for storm.
The dividend suspension is another blow for investors and Overseas Shipholding, the New York-based company that handles transporting oil, coal and grain products around the world.
/quotes/zigman/237320/quotes/nls/osg OSG 9.73, -0.43, -4.23%
The company cut its dividend in half last August, and its shares are now down 70% over the last 12 months, compared to a 1.7% gain for the Dow Jones Transportation Average DJT , of which the company is an index constituent.
Overseas Shipholding said it�s also eliminated 2011 cash bonuses for senior management and reduced board member compensation.
For the nine months ended Sept. 30, Overseas Shipholding posted a loss of $143 million, up from $79 million in the same 2010 period. Revenue declined 3% to $792 million.
In afternoon trading, Overseas Shipholding sank 12% to $10.45. Also in the sector, Nordic American Tankers NAT � fell 3% to $13.84, Teekay Tankers TNK �lost 1% to $4 and DryShips Inc. DRYS �fell 1% to $3.03.
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