Noble Corp.'s London Move May Cut Its Tax Bill in Half
Noble Corp. (NE), the offshore oil rig contractor that moved its headquarters to Switzerland in 2009, may cut its tax bill in half if shareholders approve the board’s plan to move to London.
Shareholders will vote at a special meeting in the fourth quarter to change Noble’s incorporation to the U.K. from Zug, Switzerland, the company said in a statement today. A “well-established tax regime” and business-travel environment in the U.K. would help Noble keep up with competitors, Chief Executive Officer David Williams said.
“You’ve got a pretty good tax advantage by moving to the U.K.,” John Keller, an analyst at Stephens Inc. in Houston, said in a phone interview today. The change may add 10 cents a share to Noble’s annual earnings, Keller said. “It’s not insignificant.”
Ensco Plc (ESV) and Rowan Cos., two other offshore rig companies, have changed their incorporation to the U.K. in recent years. Both are expected to report a tax rate of about 10 percent, said Keller, who rates Noble at the equivalent of a hold and owns none. Noble and Vernier, Switzerland-based Transocean Ltd. (RIG) are projected to pay a rate of at least 18 percent this year, he said.
John Breed, a spokesman for Noble, declined to comment on the tax benefits of the move. Noble plans to file a proxy with the U.S. Securities & Exchange Commission in the “coming days” with more details, he said in a phone interview.
Noble rose 1.5 percent to $38.15 at 12:21 p.m. in New York. The shares have gained 9.6 percent this year.
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