Denmark's Orsted seeks $9.4B amid US wind power opposition

Orsted, a Danish wind farm developer, saw its stock decline sharply on Monday after requesting 60 billion crowns ($9.4 billion) from shareholders. 

This move aims to strengthen its finances amidst US President Donald Trump's opposition to wind power.

The offshore wind industry, already grappling with increased costs due to high inflation and logistical hurdles in recent years, suffered an additional blow in January when Trump, on his first day back in office, halted licensing, according to a Reuters report.

Orsted’s financial struggles

CEO Rasmus Errboe said in a statement:

Orsted shares plummeted by as much as 29% to a nine-year low of 220.2 crowns. By 0815 GMT, the shares had fallen to 228.4 crowns, marking a 26% decrease.

As of Friday's market close, Orsted's rights issue is valued at nearly half of its market capitalisation, which stands at approximately 130 billion crowns.

Jefferies analysts noted that the fundraising would help de-risk the company's balance sheet, but the near-term shareholder dilution appeared substantial.

The Danish state will maintain its majority ownership in Orsted, as it has committed to subscribing to 50.1% of the new share issue, aligning with its current stake in the company, Orsted announced.

Equinor, a Norwegian company with a 10% stake in Orsted, stated through a spokesperson that it would "assess the proposal."

Orsted stated that Morgan Stanley & Co International will fully underwrite any unsubscribed shares from existing shareholders or other investors, ensuring the completion of the rights issue.

Equinor recently announced a write-down of almost $1 billion on its US offshore wind assets. The company attributed this decision to the impact of US tariffs and general instability within the American market.

The offshore wind industry has faced criticism, notably from Trump, who, during his campaign, advocated for its cessation. 

His arguments against the industry cited excessive costs and perceived harm to marine life, specifically whales, and bird populations.

Trump’s administration's April order to Equinor to halt development of a fully-permitted wind farm off New York sent shockwaves through the industry, though it was reversed the following month.

Orsted’s future plans

Orsted has halted the planned partial divestment of its Sunrise wind project, currently under development off New York, citing market uncertainty in the US.

The company announced its intention to proceed with planned divestments of stakes in its offshore wind farms: Changhua 2 in Taiwan and Hornsea 3 in Britain. 

Additionally, it has initiated the sale of its European onshore wind business, projecting proceeds exceeding 35 billion crowns from this divestment.

Errboe stated that the proceeds from the rights issue would bolster Orsted's capital structure. 

This would also aid in the development of 8.1 gigawatts of offshore wind projects, which are currently under construction and slated for completion by 2027.

In the first half of 2025, the company's earnings before interest, tax, depreciation, and amortisation (EBITDA), excluding new partnerships and cancellation fees, increased by 9% year-on-year, reaching 13.9 billion crowns, according to a separate statement.

The company reiterated its full-year outlook, projecting an adjusted EBITDA of 25 billion-28 billion crowns and gross investments of 50 billion-54 billion.