Transocean will not propose dividend Shares in Transocean, the owner of the drilling rig at the centre of the BP oil spill in the Gulf of Mexico, fell more than 6 per cent on Monday, the biggest drop in two months, after the company said it did not plan to propose a dividend at its upcoming annual shareholder meeting. The world's largest driller of deepwater wells is also taking a non-cash charge on a "substantial" portion of the goodwill associated with its contract drilling services reporting unit, it said in a brief statement. The total goodwill associated with the unit was about $8bn at the end of September last year. The charge, which has no tax effect, is primarily due to "the decline in the market valuation of the contract drilling business," Transocean said, adding that it will be announced in fourth-quarter results for 2011 on February 28. Shares in Transocean, which is headquartered in Switzerland, fell 5.12 per cent to close at SFr43.57. The company said in a separate statement that its decision on the dividend was based on a "consideration of multiple factors" in the context of its "capital allocation strategy, which is to maintain a strong, flexible balance sheet and an investment-grade rating on its debt." News on the dividend and the charge comes just days before the start of the civil trial next week in New Orleans on the Gulf of Mexico accident. Transocean, BP and Halliburton, the maker of the cement of the Macondo well, all face potential multibillion-dollar penalties from the spill. While several contractors have already settled some claims with BP, Transocean and Halliburton have so far declined to settle with the UK oil group. Analysts at RBC Capital Markets said in a note: "We view [the "multiple factors" cited on the dividend decision] mainly as the uncertainty around the Macondo litigation but also the recent related credit rating pressure and operational downtime." Peter Hutton, analyst at RBC, added: "Transocean have missed the chance to settle with BP and have therefore had to make an announcement of no announcement. For Transocean, a settlement would have been important as they don't have the visibility on cash flow . . . and it is therefore impossible to set a realistic dividend. It has been a difficult few months for the group which last year reported earnings below analyst expectations for several successive quarters. Investors have also been disappointed by Transocean's decision last November to issue $1.2bn in new shares to pay for the $1.4bn acquisition of Aker Drilling. The share sale, accompanied by a $2.5bn bond issue, was meant to protect the company's investment-grade rating after Moody's put the group on watch for a possible downgrade. It rates Transocean as Baa3, just one notch above junk. Preserving the investment-grade rating is important, particularly because leading competitors such as Noble and Diamond hold the rating.