The world’s biggest offshore wind project developer, Orsted, plans a $9.4 billion (60 billion Danish crowns) rights issue to raise capital from existing shareholders as challenges for the industry continue to mount.
Orsted plans a rights issue with pre-emptive rights for existing shareholders amid “an extraordinary situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges,” the Danish company said on Monday.
The Danish state, holder of a majority 50.1% stake in Orsted, will support the rights issue and will subscribe for its pro rata share. 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, Orsted said.
“Following the recent material adverse development in the US offshore wind market, it is not possible for Ørsted to complete the planned partial divestment and associated non-recourse project financing of its Sunrise Wind offshore wind project on terms which would provide the required strengthening of Ørsted’s capital structure,” the company said, after the U.S. renewables market was hit by the shortened phase-out deadlines for solar and wind projects in the One Big Beautiful Bill.
“Long-term, the fundamentals for offshore wind remain strong in our core markets in Europe,” said Ørsted’s Group President and CEO, Rasmus Errboe.
“However, Ørsted 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.”
Earlier this year, Ørsted warned of a continued challenging environment for the industry. Due to higher costs and interest rates, the company announced it had decided to discontinue the development of the Hornsea 4 offshore wind project in the UK in its current form.
The U.S. renewables policy has now added another layer of challenges to the offshore wind sector, for Ørsted and other developers.
By Tsvetana Paraskova for Oilprice.com
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