Transocean, one of the world's largest operators of offshore platforms, announced plans to cut dividends and impair assets on Wednesday, as the worsening oil market wreaked further havoc on the Switzerland-based company.
The scrapping of shareholder payments and an asset impairment of 2.0 billion Swiss francs ($2.1 billion, 1.8 million euros) was announced overnight and will be formalised at an extraordinary meeting on October 29, the company said in a statement.
The news sent Transocean shares down 7.3 percent to 11.30 Swiss francs in trading at 1130 GMT, as Switzerland's main SMI index saw a one percent decline.
The company, which owned and operated the Deepwater Horizon platform that caused a massive oil spill off the US Gulf of Mexico in 2010, has seen its business dry up amid the worst oil price collapse in three decades.
In a statement, Transocean said it planned to cancel the third and fourth instalments of its annual dividend payments of 60 cents per share, which was approved by shareholders in May.
"The slash in dividend does clearly not come out of the blue given the company does not get meaningful new contracts and the timing of a market recovery is highly uncertain -- hence it needs to preserve cash," said Fabien Haecki, an analyst at Vontobel.
"This comes as no surprise but we advise to stay out of the stock for now," he added.
Transocean shares have fallen by two-thirds over the last year.