Transocean says to halt dividend

Mon Feb 20, 2012 9:35pm EST

Feb 20 (Reuters) - Shares of offshore drilling contractor Transocean fell 5 percent on Monday after the company said it will not propose an annual dividend this year.

Switzerland-based Transocean said its dividend decision was based on "multiple factors", including the need to maintain a strong balance sheet and an investment grade rating on its debt.

Transocean has encountered problems getting its deepwater rigs up to new tighter standards put in place by regulators after the BP Plc oil spill disaster.

Transocean owned the rig involved in the 2010 Gulf of Mexico oil spill, while BP owned a majority of the Macondo well whose blowout led to the largest offshore oil spill in U.S. history.

Shares of Switzerland-listed Transocean fell 5 percent to 43.57 Swiss francs.

In November, Transocean shares fell to a 7-year low after the company sold shares to shore up its balance sheet.