Transocean, an offshore drilling services provider, plans to sell new shares to reduce its debt and raise additional cash. Its shares have gained 75% to $4/share due to the meme-stock frenzy and oil prices rising 40% since last October. According to a filing on Tuesday, the company plans to issue $400mn of equity through an agreement with Jefferies. The planned equity sale is one of the several ways Transocean is attempting to improve its balance sheet. The company has completed multiple debt exchanges after it won a default trial last year that could have led to it filing for bankruptcy had it been unsuccessful. Additionally, the company’s stock is a popular one among r/WallStreetBets, as it was one of the highly shorted stocks many sought after in January. Transocean is one of the few operators that did not file for bankruptcy last year, unlike many rig operators who were forced to do so due to the hit commodities took during the pandemic.
Transocean’s 11.5% 2027s are up 3.13, currently trading at 105.13 and yielding 10.27%. Its 6.8% 2038s are up 3.86, currently trading at 61.357 and yielding 12.29%.
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