Orsted Raises $9.6 Billion by Share Sale

Danish renewable energy giant Orsted, a global leader in developing, constructing, and operating offshore wind farms with a core focus on Europe, said that it has raised $9.35 billion in a rights’ offering crucial to the offshore wind giant’s future plans.

The company said on Monday that investors subscribed to 894.3 million new shares, approximately 99.3% of the shares on offer in the rights issue, to cover its finances due to the US government’s decision to stop encouraging development of wind power in the US.

The US government ordered Orsted to stop already advanced construction on the Revolution Wind project off the Rhode Island coast in August this year, but the ban was later lifted by a US Federal Judge, allowing the company to restart the work.

Those backing the measure included majority shareholder the Danish state and Equinor, the Norwegian oil and gas group that owns 10% of Orsted.

The Danish State, Orsted’s majority shareholder, took up its full entitlement, subscribing to 451.5 million shares, or 50.1% of the total. High demand from investors led to capped allocations for large orders, with smaller investors receiving full allotments.

The proceeds will cover Orsted’s immediate financing needs following its decision to retain full ownership of the 924 MW Sunrise Wind project in the US. The capital increase will also bolster the group’s balance sheet as it completes 8.1 GW of offshore wind projects, lifting its installed capacity to 18.3 GW by 2027.

Strengthening Orsted’s Finances

Orsted CEO Rasmus Errboe said that the strong backing strengthened the company’s financial foundation and allows it to focus on project execution and competitiveness amid regulatory uncertainty in the US.

“The rights issue strengthens Orsted’s financial foundation, allowing us to focus on delivering our six offshore wind farms under construction, continue to handle the regulatory uncertainty in the US, and strengthen our position as a market leader in offshore wind,” he said.

As part of the capital increase, the company’s existing shareholders received 15 subscription rights per share. With seven subscription rights, one could purchase one new share at $10.42. If the shareholder did not want to use the subscription rights, they can sell them on.

Shareholders who have not purchased new shares in connection with the share increase have had their ownership stake diluted.

Initially, Orsted’s plan was to raise money by, among other things, selling ownership interests in the American offshore wind farm Sunrise Wind. But this was not been possible due to uncertainty about the American offshore wind market.

A number of investment banks had given a guarantee that they would purchase the shares that were not sold in connection with the share increase. But due to the demand for the remaining shares, this will not be necessary, Orsted said.