UPDATE: Dahlman Rose Downgrades Overseas Shipholding Group to Sell on Uncertainty
Dahlman Rose lowered its rating on Overseas Shipholding Group (NYSE: OSG) from Hold to Sell and introduced a $0.50 price target as a tax interpretation issues violates loan covenants.
Dahlman Rose noted, "We are downgrading OSG shares to Sell due to uncertainty regarding the company's financial statements and credit facility going forward. … We believe that there is value in OSG's Jones Act business worth at least $500 million in a low-case scenario and $800 million in our high case. We had thought a potential sale of some or all of these assets could have helped OSG avoid bankruptcy, but note a strongly negative impact on future EBITDA if these assets were removed from OSG's fleet. At this point, we believe too much uncertainty regarding Chapter 11 exists and, thus, downgrade to Sell."
Overseas Shipholding Group closed at $1.23 on Monday.
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