Shares in Ørsted tumbled to their lowest level on record on Monday as investor concerns about the world’s biggest offshore wind project developer grew following a stop-work order on a nearly completed project from the U.S. Administration.
Ørsted (CPH: ORSTED) shares in Copenhagen plummeted by 18% early on Monday after trade opened, to a record low of $27.28 (174 Danish crowns).
Ørsted’s stock has lost 46% year to date, with the biggest losses seen early this month when the company announced plans for a $9.4 billion (60 billion Danish crowns) rights issue to raise capital from existing shareholders.
Earlier this year, Ørsted warned of a continued challenging environment for the industry.
Ørsted 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 August 11.
The announcement was followed by a massive sell-off in Ørsted’s stock as investors realized the need of fresh capital is a signal that the problems of the offshore wind industry from the past two years are far from over.
This Monday marked another sell-off of Ørsted’s shares after the company announced on Friday that Revolution Wind LLC, Ørsted’s 50/50 joint venture with Global Infrastructure Partner’s Skyborn Renewables, received a stop-work order from the U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM).
Revolution Wind is complying with the order and is taking appropriate steps to stop offshore activities, ensuring the safety of workers and the environment, Ørsted said.
The fully permitted project commenced offshore construction following the final federal approval from BOEM last year. The project is 80% complete with all offshore foundations installed and 45 out of 65 wind turbines installed.
Revolution Wind has 20-year power purchase agreements to deliver 400 MW of electricity to Rhode Island and 304 MW to Connecticut, enough to power over 350,000 homes across both states.
By Tsvetana Paraskova for Oilprice.com
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