RIG Transocean Ltd

Activist investor Carl Icahn has slashed his holdings in Swiss offshore drilling company Transocean Ltd. by about three-quarters to a 1.5% stake.

In a regulatory filing Wednesday Mr. Icahn reported the smaller stake, which represents some 5.48 million shares, down from a 5.88% position, or some 21.48 million shares in August, according to FactSet. The move was made "in order to recognize a capital loss for tax planning purposes," according to the filing.

Shares of the Transocean, down 16.4% over the past year, fell 0.4% to $9.98 in after-hours trading.

Mr. Icahn reported that he had increased his holdings of the company to 5.61% of outstanding shares in January 2013 after posting a new 1.62% stake a year earlier. He had sold his entire previous position in 2006.

In a 2013 filing, Mr. Ichan said he had increased his holdings because he believed the shares were undervalued. From 2013 through his most recent move, his holdings hovered mostly just under 6%.

Earlier this year, Transocean agreed to buy back the master limited partnership that it formed to boost its financial structure and mollify friction with the billionaire investor. The deal valued Transocean Partners LLC at about $514 million.

Switzerland-based Transocean, which has the world's largest fleet of offshore drilling rigs, has sharply cut its fleet, taking some rigs out of service and scrapping others as it tries to recover from an ill-timed expansion just before oil prices collapsed.

The slump in oil prices has caused energy producers to dial back investment and exploration plans, prompting two years of spending cuts, canceled projects and tens of thousands of layoffs.

Earlier this month, Mr. Icahn reported that he had exited over half of his stake in Chesapeake Energy Corp., citing similar tax-planning reasons. Mr. Icahn reported a 4.55% stake in the energy company, compared with 9.4% in August.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

September 28, 2016 19:05 ET (23:05 GMT)

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