Orsted A/S raised 60 billion Danish kroner ($9.4 billion) through a rights offering that’s critical for the company to tackle the downturn facing the wind power industry.
The fund raise, the biggest for a European energy company in over a decade, will allow the state-backed Danish firm to shore up its balance sheet after the Trump administration’s moves against offshore wind upended Orsted’s business model.
Investors took up 99.3 percent of the more than 900 million shares offered in the fully underwritten capital increase, according to a statement late Monday. The company said demand for the shares was “extraordinarily high.”
Orsted had the backing of its largest shareholder – the Danish government, which owns a 50.1 percent stake – to carry out the deal. Norwegian energy company Equinor ASA, the second-biggest shareholder, also said that it would maintain its 10 percent stake.
The company’s shares plunged by roughly a third when it announced the capital raise in August. Less than two weeks later, the stock hit another fresh low after the Trump administration ordered it to halt work on the Revolution Wind farm it’s building off the coast of Rhode Island.
But Orsted sued to block the order and soon won an injunction allowing it to resume work on the project. Since then, shares in the company have rallied, closing at 122.35 Danish kroner Monday afternoon, up some 27 percent from the low it hit after the stop work order first came into effect.
While the US was once seen as a major growth opportunity for the company, that bet has gone from bad to worse in recent years. Soaring costs and supply chain issues led Orsted to cancel two major American projects in recent years. Later, the Trump administration halted work on another project owned by Equinor.
While that wind farm was also ultimately able to proceed, the developments have left investors wary of the sector, making it impossible for Orsted to sell a stake in the Sunrise Wind project it’s building off the coast of New York. That left a hole in the company’s finances, pushing it to turn to its investors for cash instead.
With the new funds, Orsted says it will be in a strong position to deliver a series of projects currently underway in the US and Europe by the end of 2027. The company aims to finish two major projects in the US in the coming years and then refocus on the more established and stable European offshore wind market.
A rights issue is a form of capital increase that gives shareholders the option to buy stock at a discounted price in proportion to their current holding. Shareholders can either exercise their rights to avoid being diluted or sell them to other investors.
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