Feb. 18--Georgia Gulf Corp., which this week reported a fourth-quarter loss of $198.7 million, is expected to continue to hemorrhage quarterly losses through September, an analyst said in a report issued Wednesday.

In his report, Zacks Investment Research analyst Paul Raman downgraded the company's shares to "sell." He cited the company's debt, overcapacity for some of its products, the weak economy and energy costs as key reasons for his downgrade -- which has a six-month price target on the shares of "zero."

Atlanta-based Georgia Gulf has been battered in the last year by the weak economy because the chemical and plastic products its makes are used in the homebuilding industry.

Its shares have plunged nearly 86 percent in the last year. In midday trading Wednesday, Georgia Gulf stock rose six pennies to 87 cents per share.

"Georgia Gulf recently overpaid for Royal Plastics, a supplier of housing products. The acquisition was entirely financed by debt, and the company is in danger of violating debt covenants. The product lines are suffering from over-capacity," Raman wrote in his report. "As a result, we have a Sell rating with a target of $0.00."

A Georgia Gulf spokeswoman did not return a telephone call and e-mail request seeking comment late Wednesday morning.

The company, which reported having $90 million in cash and $143 million in available credit lines, had net debt of $1.3 billion as of Dec. 31. That debt stems largely from its $1.1 billion purchase of Canada-based Royal in 2006. At the time, Wall Street was skeptical the deal was worthwhile.

Georgia Gulf was banking the acquisition would help buffer it from the cyclical swings of the chemical business and help it take advantage of growth in the construction sector, including home remodeling and repair.

But that was before the economy tanked.

Georgia Gulf said it reduced its debt by $83 million in 2008 and was in compliance with its debt obligations in the fourth quarter.

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