Renewable Energy

Investor calls on Ensco Rowan to sell debt to fund $2.5 bln dividend

Ensco Rowan Plc investor Luminus Management on Wednesday urged the deep-sea oil driller to sell guaranteed bonds to fund a special dividend of $2.5 billion, citing the stock's "disappointing" performance despite a recent acquisition.

Updates shares, adds details

June 12 (Reuters) - Ensco Rowan Plc ESV.N investor Luminus Management on Wednesday urged the deep-sea oil driller to sell guaranteed bonds to fund a special dividend of $2.5 billion, citing the stock's "disappointing" performance despite a recent acquisition.

Shares of Ensco Rowan - formed after Ensco bought Rowan in April for $2.38 billion - fell more than 7% to their lowest in more than two decades, amid a broader drop in energy stocks as crude prices plunged about 2%.

"Extremely disappointed by the absolute and relative trading performance of Ensco Rowan both before, and since, consummation of the Ensco-Rowan merger," Luminus said in a letter to Ensco Rowan's board.

A commitment to pay out the dividend should lead to an immediate re-rating of the stock, according to Luminus, an investment advisor to funds that own 4.5% of Ensco Rowan.

Ensco Rowan's shares have more than halved in value since the merger closed on April 11. They fell to a low of $7.02, giving the company a market value of about $1.40 billion.

Ensco Rowan, which last month scrapped its regular quarterly cash dividend, did not immediately respond to a request for comment.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluivla)

((Arundhati.Sarkar@thomsonreuters.com; +1 646 223 8780 Ext: 1524; Reuters Messaging: arundhati.sarkar.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Energy Videos

    #TradeTalks: The Energy Complex, Depressed Demand and Lackluster Turnaround Season

    Mizuho Americas Senior Energy Analyst Bob Yawger joins Jill Malandrino on Nasdaq #TradeTalks to discuss the energy complex, depressed demand and lackluster turnaround season.

    2 days ago

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More