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Transocean Selling 38 Shallow Water Drilling Rigs

Stocks in this article: RIG

NEW YORK (AP) â¿¿ Transocean is selling 38 of its shallow water drilling rigs to newly-formed Shelf Drilling International Holdings Ltd. for about $855 million in cash as it looks to become more competitive.

The Zug, Switzerland-based company said Monday that the deal also includes $195 million in preferred shares being issued by Shelf, which is owned by private equity groups and management.

The companies said that would bring the total value of the deal to about $1.5 billion.

Transocean Ltd. says it will provide some transition support services to Shelf as part of the transaction.

Transocean anticipates taking a third-quarter charge related to the transaction. Its stock gained more than 2 percent in premarket trading Monday.

The deal is expected to close in the fourth quarter.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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