CHICAGO, Feb 14 (Reuters) - Buildings products manufacturer USG Corp. said on Wednesday it cut its quarterly dividend sharply as a result of restructuring initiatives due to a downturn in its businesses and asbestos litigation costs.

USG said it reduced its quarterly payout to 2.5 cents a share, down from 15 cents a share. The dividend will be paid on March 21, 2001 to shareholders of record as of Feb. 23, 2001, the company said.

Last month, the Chicago-based company reported a net loss of $523 million after $557 million in special after-tax charges due to asbestos litigation costs and restructuring expenses. In a statement, USG president and chairman William Foote said the dividend cut will provide the company with an ``additional level of financial flexibility.''

``More specifically, this will allow us the liquidity to continue to optimize our businesses as we face the current industry down cycle and as we intensify our efforts to secure satisfactory asbestos legislation,'' Foote said.