EQNR - Transocean - Management Expresses Unbroken Optimism Despite Major Challenges

• Stock rallies after management points to a likely industry recovery starting in H2/2021. Discussing comments made on the company's Q3 conference call on Tuesday.
• Transocean still has to deal with the fallout from recent debt exchange transactions as large noteholders have filed a lawsuit and provided notices of default for certain bonds.
• In addition, the company needs to regain timely compliance with the NYSE's continued listing requirements to avoid violating additional bond covenants.
• Transocean needs a massive industry recovery to successfully deal with medium-term debt maturities after current cash reserves will have to be used for massive capex requirements next year.
• Given material short- and medium-term risks, conservative investors should continue to avoid the shares.

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