Equinor ASA said Monday it intends to buy into Orsted A/S’ DKK 60 billion ($9.4 billion) stock sale to maintain its 10 percent ownership.
Denmark’s majority state-owned Orsted announced “a rights issue with pre-emptive rights for existing shareholders” on August 11, instead of pursuing a planned partial sale from the Sunrise Wind offshore project in the United States. Orsted said then the farm-down could not be completed due to “recent material adverse development in the U.S. offshore wind market”.
Last week Orsted affirmed the stock sale would proceed even after U.S. authorities stopped activities at another offshore wind project owned by the company, Revolution Wind.
“Subject to the final terms of the rights issue, Equinor will subscribe for new shares at a consideration of up to DKK 6 billion, or around $939 million, based on a USD/DKK exchange rate of 6.39”, Norway’s primarily state-owned Equinor said in a statement on its website.
“Equinor will participate in the rights issue within its communicated financial framework and remains committed to delivering competitive capital distribution”.
Equinor said it would also have a candidate for Orsted’s board of directors.
“Equinor’s support of the Rights Issue reflects confidence in Orsted’s underlying business, and the competitiveness of offshore wind in the future energy mix, in selected geographies”, Equinor said.
“In response to the challenges facing offshore wind, the industry will see consolidation and new business models. Equinor believes that a closer industrial and strategic collaboration between Orsted and Equinor can create value for all shareholders in both companies”.
Equinor owns 0.4 gigawatts (GW) of net installed offshore wind generation capacity, plus three GW under development, according to the company.
“The current focus is on completing the ongoing development projects in North-West Europe and Empire Wind 1 in the U.S.”, the statement said.
Under Orsted’s stock sale, current shareholders “will have a pre-emptive right to subscribe for their respective pro rata share of the capital increase in the Rights Issue and thereby retain the same relative ownership as they have today”, Orsted said August 11.
“The Danish state has undertaken towards Orsted to subscribe for its 50.1 per cent pro rata share of the Rights Issue.
“Any shares not subscribed for by the existing shareholders by exercising their pre-emptive right or by other eligible investors are fully underwritten by Morgan Stanley & Co. International PLC to provide certainty that the Rights Issue will be completed.
“The proceeds from the Rights Issue will be used to strengthen Orsted’s capital structure and provide financial flexibility to ensure an appropriate capitalisation in the years 2025 through 2027, during which Orsted will deliver its 8.1 GW offshore wind construction portfolio”.
The expected gross proceeds of DKK 60 billion would also be used to cover spending for the 924-megawatt (MW) Sunrise Wind under construction offshore New York, Orsted said.
On August 25 Orsted affirmed the stock sale would proceed, after the Bureau of Ocean Energy Management halted the 704-MW Revolution Wind offshore Rhode Island, a 50-50 venture with Global Infrastructure Partners’ Skyborn Renewables.
The project is 80 percent complete with all foundations installed and 45 out of 65 wind turbines installed, according to Orsted.
Orsted is pursuing talks with U.S. authorities to get the project back on track for start-up next year, as well as considering legal action.
“The stop-work order for Revolution Wind emphasizes the increased regulatory uncertainty for offshore wind in the U.S.”, Orsted said.
“The planned rights issue has been sized to provide the required strengthening of Orsted’s capital structure to execute its business plan, even when taking into account the impact of this uncertainty on Orsted’s U.S. offshore wind portoflio”.
Also on August 25 Orsted announced BNP Paribas, Danske Bank A/S and J.P. Morgan SE as joint global coordinators alongside Morgan Stanley for the stock sale. BofA Securities Europe SA and Goldman Sachs have been appointed joint bookrunners.
“The syndicate of banks are jointly underwriting the rights issue for the approximately 49.9 percent not covered by the Danish state’s undertaking”, Orsted said.
To contact the author, email jov.onsat@rigzone.com
element
var scriptTag = document.createElement(‘script’);
scriptTag.src = url;
scriptTag.async = true;
scriptTag.onload = implementationCode;
scriptTag.onreadystatechange = implementationCode;
location.appendChild(scriptTag);
};
var div = document.getElementById(‘rigzonelogo’);
div.innerHTML += ” +
‘
‘ +
”;
var initJobSearch = function () {
//console.log(“call back”);
}
var addMetaPixel = function () {
if (-1 > -1 || -1 > -1) {
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
} else if (0 > -1 && 68 > -1)
{
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
}
}
// function gtmFunctionForLayout()
// {
//loadJS(“https://www.googletagmanager.com/gtag/js?id=G-K6ZDLWV6VX”, initJobSearch, document.body);
//}
// window.onload = (e => {
// setTimeout(
// function () {
// document.addEventListener(“DOMContentLoaded”, function () {
// // Select all anchor elements with class ‘ui-tabs-anchor’
// const anchors = document.querySelectorAll(‘a .ui-tabs-anchor’);
// // Loop through each anchor and remove the role attribute if it is set to “presentation”
// anchors.forEach(anchor => {
// if (anchor.getAttribute(‘role’) === ‘presentation’) {
// anchor.removeAttribute(‘role’);
// }
// });
// });
// }
// , 200);
//});
