Oveseas Shipholding may file for Ch. 11 protection
NEW YORK (AP) — Tanker operator Overseas Shipholding Group Inc. said Monday that its financial statements going back to 2008, including its first- and second quarter 2012 results, should not be relied upon. The New York-based company is considering strategic options and may filed for Chapter 11 bankruptcy protection filing.
Overseas Shipholding's stock plunged $1.973, or 60.6 percent, to $1.28 in premarket trading on Monday.
Overseas Shipholding said in a filing with the Securities and Exchange Commission that it is continuing its review of a tax issue that arises from the fact that the company is domiciled in the U.S. and has substantial international operations, and relates to the interpretation of certain provisions in its loan agreements.
In late September, board member and audit committee member G. Allen Andreas resigned from his post, citing a disagreement over to the process the Overseas board is taking reviewing the issue. The company responded with a letter stating it did not understand his statement regarding the disagreement, and outlined board actions in response to the issue.
The company on Monday said it is deciding whether it needs to restate its financial results. It continues to assess its strategic alternatives, which includes potentially filing for reorganization under Chapter 11 bankruptcy protection.
In August Overseas Shipping reported that its second-quarter loss widened and that it drew down the last of its revolving credit facility. CEO Morten Arntzen also said at that time that the company was talking to bankers about long-term financing "to manage through an extended downturn" in its international-flag tanker markets. He said the company was also pursuing other options to boost liquidity.
Overseas Shipholding had $2.24 billion in total debt at the end of the second quarter, up from $2.07 billion six months earlier.
Shares closed Friday at $3.25, down 70 percent since the start of the year.