Transocean's Dividend Questioned by U.S. Senators
The payout may be a way to limit the company’s liability following the April 20 explosion of its Deepwater Horizon drilling rig in the Gulf of Mexico, according to the letter released today by Senator Ron Wyden, a Democrat from Oregon.
“We are concerned that such action to quickly move money out of corporate coffers to individual investors may make it more difficult to pursue liability claims against the company,” according to a copy of the letter.
In February, the company recommended the $1 billion dividend, which shareholders approved on May 14, according to Transocean spokesman Guy Cantwell. Cantwell declined to comment on the letter. It is the company’s first dividend in “several years,” he said.
Transocean owned the drilling rig, which exploded April 20 and sank two days later, killing 11 workers and setting off an oil spill that threatens the Gulf Coast. BP Plc was the rig operator.
The company fell $4.48, or 7.6 percent, to $54.76 at 3:39 p.m. in New York Stock Exchange composite trading. Transocean has fallen 40 percent since the April 20 rig explosion.