UPDATE 1-Nordic American says to continue paying dividends

Fri Jul 2, 2010 8:33am EDT

* Says not to access equity markets for funding

* Expects tanker spot rates to be volatile

July 2 (Reuters) - Nordic American Tanker Shipping Ltd (NAT.N) said it will continue its quarterly dividend policy and does not need equity financing in order to increase its fleet size.

In a letter to shareholders, Chief Executive Herbjorn Hansson said Nordic American had grown its fleet to 20 from 14 vessels since Jan. 1, 2009, and had "ample" financial resources to increase its fleet up to 22 vessels or more without tapping the equity market.

"Consequently, the company has no plans to issue new shares," Hansson said.

The CEO said tanker spot market rates had been volatile in the first half of 2010 and that he expected the trend to continue.

"We believe that our full dividend payout policy together with low costs and our spot rate exposure will continue to enable us to achieve a competitive cash yield compared with that of other tanker companies."

In the second quarter of 2009, Nordic American had cut its dividend to 50 cents a share from 88 cents a share due to weak markets. It further cut dividend to 10 cents a share in the third quarter of 2009 before raising it to 25 cents a share for the fourth quarter.

Shares of the company closed at $27.53 Thursday on the New York Stock Exchange.

For the alerts, please double click [ID:nWNAB2789] (Reporting by Arup Roychoudhury in Bangalore; Editing by Roshni Menon)

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