* Icahn still wants $4 per share dividend
* Company plans $2.24 per share payout
* Shares up slightly
March 4 Activist investor Carl Icahn affirmed
plans to propose a $4.00 per share dividend at Transocean Ltd's
annual meeting, a day after the world's
largest drilling contractor said it will restart payouts at a
Icahn, who has been campaigning for a higher payout for over
a month, said he would propose the dividend he had suggested in
January, at Transocean's annual meeting on May 17, according to
a filing with the U.S. Securities and Exchange Commission on
Transocean's latest plan "further highlights a long track
record of weak capital allocation strategy," Icahn said in the
The board has recommended that shareholders approve a $2.24
per share dividend. The total payout would be about $800
million, the company said on Sunday.
After paying a dividend in 2011, its first in nine years,
Transocean last year abandoned payouts that totaled $3.16 per
share annually, to maintain a strong balance sheet and
investment-grade rating on its debt.
On Monday, Chief Financial Officer Esa Ikaheimonen said it
would be a stretch for Transocean to launch an initial public
offering of a master limited partnership of some of its rigs in
2013 because the process would take about a year to complete.
But he added that Transocean had attractive assets for such
a transaction, particularly among its Gulf of Mexico
"The market size is limited so I think up to three
ultra-deepwater rigs could potentially be an IPO, and nothing
much more than that," Ikaheimonen said in his first quarterly
conference call since he was hired from Seadrill last
"You will have to wait and see and we will keep you up to
date as to when we make progress."
Ikaheimonen had been involved in spinning out an initial
group of four rigs from Seadrill into a partnership.
Icahn said he would nominate three directors to Transocean's
board who will have experience creating "yield vehicles" and can
help the drilling contractor execute an MLP strategy.
The company has struggled with ballooning costs over the
past few years as it sought to get its aging fleet into shape
under stricter regulations that followed BP's 2010
Macondo oil spill, which destroyed a Transocean rig and killed
Transocean reached a $1.4 billion settlement with the U.S.
government on Jan. 3 over its liability in the Macondo disaster.
Ten days later, Icahn declared his initial stake of about 1.56
Because of the reduced uncertainty with the Macondo
settlement, Ikaheimonen said the company would now seek to
maintain total financial liquidity of $3.5 billion to $4.5
billion, down from a previous range of $5 billion to $6 billion.
Switzerland-based Transocean, which has long-term debt of
more than $11 billion, plans to accelerate repayment with an
objective of retiring $1 billion of debt by the end of 2014.
Transocean on Friday reported revenue growth and a
higher-than-expected profit for the quarter that ended Dec. 31,
as more of its fleet was working compared with a year ago.
Transocean said its revenue efficiency, or how much it
earned compared with what it could have made, rose to 94.7
percent from 91.8 percent in the same quarter in 2011, and it
aims to stay at least around 93 percent.
But in the first two months of the first quarter, revenue
efficiency had been only around 90 percent due to a previously
announced inspection and replacement of bolts on some of its
rigs, Ikaheimonen said.
Transocean shares rose 4 cents to $52.19 on the New York
Stock Exchange late Monday afternoon, while the Philadelphia oil
service index was down about 1 percent.