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Yahoo
7 days ago
- Business
- Yahoo
Ørsted announces $9.3bn rights issue to fund offshore wind projects
Denmark-based offshore wind power developer Ørsted has announced a DKr60bn ($9.3bn) rights issue to enhance its capital structure and offer financial flexibility, ensuring adequate capitalisation from 2025 to 2027. The rights issue was announced following the recent significant adverse development in the US offshore wind market. As a result, the company is unable to proceed with the planned partial divestment and the associated non-recourse project financing for its Sunrise Wind offshore project. This situation is preventing the company from achieving the necessary enhancement of its capital structure to support its investment programme and business plan. Ørsted now faces an incremental funding requirement of DKr40bn, as it needs to finance the construction of the entire project from its balance sheet without external financing. The funds from this capital raise will support Ørsted's financial position as it aims to deliver an 8.1GW construction portfolio by 2027. Existing shareholders will have the pre-emptive right to subscribe for their respective pro rata share of the capital increase in the rights issue, thereby allowing them to maintain their current relative ownership stake. The Danish state has committed to subscribing for its pro rata share of 50.1% in the rights issue, while Morgan Stanley stands as the underwriter, ensuring full subscription. Ørsted chair of the board of directors Lene Skole stated: 'Given the unprecedented regulatory development in the US, we have made a comprehensive assessment of all options, and Ørsted's board of directors has concluded that the planned rights issue is the best path forward for the company and its stakeholders. 'The rights issue will strengthen Ørsted's capital structure and provide financial robustness in the years 2025 through 2027, during which we'll deliver on our 8.1GW offshore wind construction portfolio. This will be the foundation for generating long-term value from Ørsted's platform and capabilities, for the benefit of our shareholders and other stakeholders.' The rights issue is designed to cover additional funding needs and to allow more flexibility in partnership timings and divestments related to other offshore wind farms. It enables Ørsted to maintain its competitive edge and pursue profitable investments in offshore wind farm markets within Europe and select markets in the Asia Pacific region. Alongside this development, Ørsted is continuing with efforts towards farm-down processes at the Changhua 2 and Hornsea 3 offshore wind farms and is considering divesting its European onshore business. This move can potentially raise more than DKr35bn in proceeds in 2025/26. An extraordinary general meeting is scheduled for September 2025, where shareholders will vote on authorising this rights issue. Ørsted group president and CEO Rasmus Errboe stated: 'To deliver on our business plan and commitments in this environment, we've concluded that a rights issue is the best solution for Ørsted and our shareholders. The rights issue will reinforce our ability to realise the full value potential of our existing portfolio and capture future value-creating opportunities in offshore wind. 'At a critical time when we're constructing 8.1GW of offshore wind capacity and making good progress across our entire construction portfolio, the rights issue will ensure a capital structure which supports a solid investment-grade credit rating and a more robust Ørsted.' Lazard Frères and Morgan Stanley & Co International are serving as financial advisors to Ørsted and its board of directors. "Ørsted announces $9.3bn rights issue to fund offshore wind projects" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Qatar Tribune
11-08-2025
- Business
- Qatar Tribune
Orsted tumbles on plans to raise $9.4 billion in share sales
Agencies Danish offshore wind power group Orsted slumped on Monday as the company announced plans to raise 60 billion kroner ($9.4 billion) by selling new shares, further deepening the firm's woes due to U.S. President Donald Trump's opposition to the sector and renewable energy in general. Shares in Orsted tumbled 28% on the Copenhagen stock exchange following its announcement. The company had plans to sell a stake in its delayed Sunrise Wind project off the coast of New York. But, Orsted said in a statement Monday that it was 'not possible' to complete the partial divestment following 'the recent material adverse development in the U.S. offshore wind market.' The entire sector faces a major challenge in the U.S. after Trump froze federal permitting and loans for all offshore and onshore wind projects. Orsted said it would not be able to sell the Sunrise Wind stake on terms that would supply the company with the necessary funds to support its business plan. 'Orsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years' macroeconomic and supply chain challenges,' Orsted CEO Rasmus Errboe said in a statement. The company said the plans to sell new shares were supported by the Danish state, which is a majority shareholder. Empire Wind, another massive offshore wind power project off the coast of New York being constructed by Norway's Equinor, was temporarily halted by the Trump administration in mid-April. Equinor said in July that the project had lost nearly $1 billion in value due to regulatory changes and tariffs. Orsted was once considered a success story. In less than a decade – from 2010 to 2019 – it transitioned from a traditional energy company that relied on fossil fuels for energy production to one that derived 86% of its energy from renewable sources.
Boston Globe
11-08-2025
- Business
- Boston Globe
As Trump curbs wind farms, Orsted plans $9.4 billion share offering
Existing shareholders will have the right to buy shares proportional to their ownership. Orsted said that the Danish government, which owns 50.1 percent of the company, had agreed to subscribe to its 'pro rata' share. Advertisement The planned share sale amounts to about 45 percent of Orsted's market value Friday. In the past, Orsted, which operates the Block Island Wind Farm off the coast of Rhode Island, has reaped profits by initiating projects and then selling off large stakes in them to investors who want exposure to green energy. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up In its announcement of issuing new shares, the company appeared to blame the Trump administration, which has adopted a skeptical approach to renewable energy and offshore wind in particular. 'Orsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years' macroeconomic and supply chain challenges,' Rasmus Errboe, the company's chief executive, said in a statement Monday. It is widely accepted in the energy industry that new projects are highly unlikely as long as Trump is in office, but Orsted's announcement shows that there is a cloud over those already under construction as well. Advertisement Orsted, which has led the development of offshore wind farms in Europe, has stumbled badly in the United States, where it had bet heavily. Well before Trump's reelection in 2024, inflation and higher interest rates slashed the profitability of planned projects, forcing the company to write off large projects and cancel wind farms. More recently, the Trump administration's actions have raised questions about whether there would be a future for offshore wind in the United States, once considered one of the world's most promising markets. The Trump administration is withdrawing offshore acreage from availability for new wind farms and threatening reviews that could lead to delays or halts of those already under construction. 'The Department of the Interior is ending special treatment for unreliable energy sources, such as wind,' the administration said last month. Such moves could hit Orsted, which is building two other wind farms off the East Coast of the United States, including Revolution Wind near Rhode Island and Connecticut. Tariffs on imported equipment like wind turbines will also raise costs. Orsted's $9.4 billion estimate of the additional funding now needed to complete Sunrise Wind seems 'very high,' Deepa Venkateswaran, a utility analyst at Bernstein, a Wall Street research firm, wrote in a note to clients. As a result, she suggested that there might be other risks lurking, including further negative developments in the United States, that 'the company is being less open about.' This article originally appeared in . Dana Gerber of the Globe staff contributed to this report. Advertisement
New York Times
11-08-2025
- Business
- New York Times
As Trump Curbs Wind Farms, Orsted Plans $9.4 Billion Share Offering
Orsted, the large Danish renewable energy developer, said on Monday that it would issue 60 billion Danish kroner, or about $9.4 billion, in new shares to shore up its finances amid a downturn in an industry that has been exacerbated by President Trump's resistance to wind farms. The move caught markets by surprise, sending Orsted's share price tumbling about 31 percent in trading in Copenhagen. The company said it was issuing the new shares because it was unable to carry out plans to sell a portion of Sunrise Wind, a large offshore wind project it is building 30 miles off Montauk Point in New York. Existing shareholders will have the right to buy shares proportional to their ownership. Orsted said that the Danish government, which owns 50.1 percent of the company, had agreed to subscribe to its 'pro rata' share. The planned share sale amounts to about 45 percent of Orsted's market value on Aug. 8. In the past, Orsted has reaped profits by initiating projects and then selling off large stakes in them to investors who want exposure to green energy. In its announcement of issuing new shares, the company appeared to blame the Trump administration, which has adopted a skeptical approach to renewable energy and offshore wind in particular. Want all of The Times? Subscribe.
Reuters
11-08-2025
- Business
- Reuters
Breakingviews - Orsted's big cash call jars with its fresh start
LONDON, Aug 11 (Reuters Breakingviews) - Rasmus Errboe's fresh start has already been blown off course. The boss of $20 billion Orsted ( opens new tab, who took the helm in February, is asking shareholders for 60 billion Danish crowns ($9 billion) to cut debt and keep building Sunrise Wind, a troubled U.S. project. A 29% slump in the Danish offshore developer's share price reflects that its big problem under predecessor Mads Nipper – asserting that the worst was past only to then unveil a new nasty surprise – hasn't really gone away. The capital raise comes on the back of a stretched balance sheet battered by inflation, supply-chain delays, and shifting subsidy policies that have upended the nascent U.S. offshore wind industry. These factors already led Orsted to scrap, opens new tab some U.S. projects and book hefty impairments, but as recently as April Errboe was still confident in his project funding. Now, a stop-work order by the wind-phobic administration of President Donald Trump in April to a separate Equinor ( opens new tab scheme has left the Danish group concerned it wouldn't be able to finance the buildout of Sunrise Wind, even though the order was lifted in May. That's because the funding hinged on Orsted selling stakes in the project to third parties – 'farm-downs', in the terminology – despite being only at an early stage of construction. The U.S. government's hostility and unpredictability implies less lucrative farm-downs, meaning Errboe has to shoulder the cost on his company's balance sheet. To preserve its investment-grade credit rating, that means raising 40 billion crowns for Sunrise Wind, plus an extra 20 billion crowns to cater for extra capital spending needs. Errboe can't do much about Trump. Yet rivals like Iberdrola ( opens new tab and SSE (SSE.L), opens new tab tend to sell stakes and recycle capital later on, when projects are near completion or operational. In good times, Orsted's approach frees up capital early, fueling faster growth. But when buyers turn cautious and financial conditions tighten, the model leaves it scrambling for cash to keep the construction going. Throw in the fact that Errboe has cut forecasted return on capital employed and 2026 EBITDA, and investors have another unpleasant and stock-specific shock. Given that the issue is fully underwritten by Morgan Stanley (MS.N), opens new tab and backed by the Danish state, which owns 50.1%, Orsted will get its cash. Errboe can point to the fact that only 20% of his offshore wind capacity under construction will emanate from the U.S. Hence when the hole is plugged he still sees scope for 13% group returns on capital employed from 2028. Still, the scale of the capital needs relative to its now-$14 billion market cap is striking. Plenty of minority investors will think hard before playing ball - Equinor, which holds a 10% stake, merely said it would "assess the proposal". Errboe's task is to convince them that he isn't just buying time before the next shock. Follow Yawen Chen on Bluesky, opens new tab and LinkedIn, opens new tab.
