Westshore Terminals Investment Corp., operator of North America’s largest coal-export facility, fell the most since August 2011 after saying it will cap dividend payments to help pay for the replacement of aging equipment.
Westshore dropped 5.3 percent to C$27.02 ($26.84) in Toronto after earlier declining as much as 10 percent.
The company plans to spend C$210 million over as long as five years at its coal terminal south of Vancouver, it said in a statement today. Westshore plans to set aside cash in a so-called capital projects fund to reduce future borrowing, the Vancouver-based company said.
Westshore will limit its quarterly dividend to C$0.33 a share starting in the second quarter. The company reduced its fourth-quarter payout to C$0.275 from C$0.33 in the previous quarter after a December incident in which a ship struck an elevated railway trestle at the terminal, disrupting output. The company has yet to announce its first-quarter distribution.
Allocating money to the fund will “significantly reduce per-share dividends which were expected to increase substantially this year,” Megan MacNeill, a Vancouver-based analyst at Haywood Securities Inc., said in a note. She downgraded her rating on Westshore to sell from hold.