Shares in Danish renewable energy firm Ørsted fell more than 28% on Monday following the company’s announcement of a DKK60 billion (€8 billion) rights issue aimed at bolstering its balance sheet and funding offshore wind projects.
As of 12:00 local time, Ørsted’s stock was trading at DKK221.20, down 28.3% from the opening price. The sharp decline came shortly after the company confirmed it would proceed with a significant equity raise, backed by the Danish State, which holds a 50.1% stake.
The move follows Ørsted’s decision to abandon a planned partial divestment of its Sunrise Wind offshore wind farm in the United States, citing unfavourable market conditions.
Ørsted said the financing package was necessary in light of “material adverse” developments in the U.S. offshore wind market, which made it “impossible to conclude the planned partial sale and associated non-recourse project financing on terms that would strengthen its balance sheet.”
The rights issue will give existing shareholders the option to maintain their current ownership levels. The Danish government has committed to subscribing to its full entitlement, and any remaining shares will be fully underwritten by Morgan Stanley & Co. International plc.
The company said proceeds from the raise will be used to reinforce its capital structure through 2027 and maintain an investment-grade credit rating, while supporting the delivery of its 8.1 gigawatt offshore wind construction pipeline.
The funding is also expected to cover increased capital needs stemming from Ørsted’s full ownership of Sunrise Wind, and provide greater flexibility in timing future divestments and partnerships.
“The rights issue will strengthen Ørsted’s capital structure and provide financial robustness in the years 2025 through 2027, during which we’ll deliver on our 8.1GW offshore wind construction portfolio,” said Chair Lene Skole in a statement.
The company plans to seek shareholder approval for the capital raise at an extraordinary general meeting scheduled for 5 September.
