Shares of Nordic American Tankers Ltd. , which operates a trading fleet of 20 vessels, slid 26% Wednesday, after the company announced a to recapitalization program with an underwritten offering of $110 million of common shares, priced at $2.75 a pop. The proceeds of the deal will be used to pay down a credit facility stemming from 2004, finance growth and for general corporate purposes. Evercore ISI analysts said the plan was “more punitive than expected.” If it is successful, the company can return to paying up to 50% of its cash flow as dividends, although until then, the dividend will be capped at 3 cents a share. If the recap is not successful, there is a backstop facility in place at an interest rate of at least 78.4% and a dividend cap of 3 cents a share, they wrote in a note. “In the end, although the recap was necessary it is more costly than we had expected and until the Backstop Facility is cancelled the stock may remain under pressure. As such, we are lowering our price target to $3 (from $4) and we maintain our underperform rating,” they wrote. Shares are down 67% in 2017, while the S&P 500 has gained 19%
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