Shares of Diana Shipping spinoff OceanPal fell more than 11% in Thursday trading in New York after the owner announced it is seeking to raise $14.5m from a public share offering.

The public offering of 7.4m shares, underwritten by investment bank Maxim Group, would nearly double the shares count of the Nasdaq-listed company and see insiders Semiramis Paliou and Ioannis Zafirakis sell 1.78m units between them.

The process is somewhat unusual, in that OceanPal was hived off from Diana in November and began publicly trading at that time, yet did not raise new capital in connection with the spin-off.

But that is happening now at a projected price of $1.95 per share in a structure that bundles common shares with warrants, which is a structure Maxim has used often for owners such as Castor Maritime, Seanergy Maritime Holdings and Globus Maritime.

OceanPal will not receive any proceeds from the stock being sold by Paliou, who is Diana's chief executive and OceanPal's chairwoman, or Zafirakis, who is chief strategy officer of Diana and interim chief financial officer of OceanPal.

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The shares closed on Thursday at $1.95, down 11.8% from the previous close of $2.21 and equal to the assumed offering price.

"We expect to use the proceeds that we receive from this offering for general corporate purposes, including for the potential future acquisition of vessels. Accordingly, our management will have discretion and flexibility in applying the net proceeds of this offering," OceanPal said in the filing.

Prior to the offering, the market capitalisation of three-ship OceanPal stood at around $17.2m.

The company started life in November by taking in Diana's 73,600-dwt Protefs (built 2004), 73,700-dwt Calipso and 171,800-dwt Salt Lake City (both built 2005).

"Management of Diana Shipping believes that the distribution of a separate, publicly traded dry bulk company focusing on older vessels with shorter duration charters will further enhance shareholder value by providing greater exposure to the shorter-term charter market," Athens-based Diana said in explaining the spin-off.

Diana also gave OceanPal first refusal over six other Diana bulkers.