Transocean Ltd. is seeking to cancel the third and fourth installments of its dollar-denominated dividend this year, which the company had already approved in May.
Shares dropped 12% to $10.75 in after-hours trading. Through Tuesday’s close, they had fallen 67% in the past 12 months.
The offshore driller said in February that it planned four installments of 15 cents each, which represented an 80% reduction from the previous payout rate, citing its “cyclical and capital-intensive industry.”
Transocean said Tuesday that it will seek shareholder approval of the cancellation at an Oct. 29 meeting. The company is also seeking a par value reduction of its shares to address expected capital losses. It expects to record impairment charges for investments in affiliates “in light of the deterioration of the offshore drilling market and concerns regarding the timing of the market’s recovery.”
In August, Transocean said its second-quarter revenue fell 19% to $1.88 billion.
On Monday, Moody’s Investors Service placed the ratings of 11 offshore drillers including Transocean under review for downgrade. The rating firm said contractors “will face an extremely challenging operating environment through at least 2017.”
In May, BP PLC agreed to settle its remaining claims with Transocean and Halliburton Co. over the 2010 Deepwater Horizon oil spill, with which all three companies had involvement.