Orsted Plans Rights Issue to Raise $9.34 Billion

Danish multinational energy company Orsted, which is the world’s biggest offshore wind-farm developer, has announced its plan for a rights issue with support from the Danish State as majority shareholder and gross proceeds of $.9.34 billion, but this has sent the company’s share price into a tailspin by nearly 27% plunge on the Copenhagen Stock Exchange.

Orsted said that following the recent adverse development in the US offshore wind market, it was not possible for the company 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 Orsted’s capital structure in order to support the company’s investment programme and business plan.

Based on this development, Orsted’s Board of Directors has decided to discontinue the process for the partial divestment of Sunrise Wind and to plan a rights issue with pre-emptive rights for existing shareholders (the Rights Issue).

The Rights Issue will amount to $9.34 billion in gross proceeds. Existing 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.

The Danish state has undertaken towards Orsted to subscribe for its 50.1% 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 it will deliver its 8.1 GW offshore wind construction portfolio.

In the past, the company said that the financing of its business plan requires, among other things, execution of its divestment programme. The absence of proceeds from the partial divestment of Sunrise Wind and the associated project financing means that Orsted is required to fund the construction of the entire project on its balance sheet, which leads to an incremental funding requirement of approximately $6.23 billion.

As part of its ongoing programme to strengthen its capital structure and sharpen the strategic focus on its core business, Orsted continues to progress the previously announced farm-down processes for its Changhua 2 and Hornsea 3 offshore wind farms.

In addition, Orsted has launched a sales process for a potential full divestment of its European onshore business and expects to raise more than $5.45 billion in proceeds from divestments during 2025-2026.

Orsted will convene an extraordinary general meeting to be held on 5 September 2025 to propose that the general meeting authorise the Board of Directors to conduct the Rights Issue.

Rights Issue Best Option

The company’s chair Lene Skole said that given the unprecedented regulatory development in the US, they have made a comprehensive assessment of all options, and the Board of Directors has concluded that the planned rights issue is the best path forward for the company and its stakeholders.

The rights issue will strengthen Orsted’s capital structure and provide financial robustness in the years 2025 through 2027, during which the company will deliver on its 8.1 GW offshore wind construction portfolio.

“The rights issue format treats all shareholders equally and provides all our shareholders with the opportunity to maintain their current ownership by subscribing for new shares, and I’m satisfied with the support from the Danish State as our majority shareholder,” Skole added.