Ongoing problems in the US lead Ørsted to launch rights issue

At the EGM, the board of directors at the company will seek approval for a rights issue amounting to Dkr60Bn in gross proceeds. Shares in the company fell steeply after the announcement.

Ørsted group president and chief executive Rasmus Errboe said, “The rights issue announced today will strengthen Ørsted’s capital structure and provide financial robustness in the years 2025 through 2027, during which we will  deliver on our 8.1-GW offshore wind construction portfolio.”

The company said the rights issue is intended to enhance the value of Ørsted’s portfolio by covering the incremental funding requirements from the full ownership of the Sunrise Wind offshore windfarm in the US; and strengthen its capital structure to preserve and optimise the value of its operational and construction portfolio. 

The company said that, following the recent material adverse development in the US offshore wind market, it is not possible for Ørsted to complete the planned partial divestment and associated non-recourse project financing of the Sunrise Wind project on terms which would provide the required strengthening of Ørsted’s capital structure. 

Based on this development, Ørsted’s board has decided to discontinue the process for the partial divestment of Sunrise Wind and plans a rights issue with pre-emptive rights for existing shareholders. The absence of proceeds from the partial divestment of Sunrise Wind and the associated project financing means that Ørsted is required to fund the construction of the entire project on its balance sheet, which leads to an incremental funding requirement of approximately Dkr40Bn (US$6Bn).

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 Ørsted to subscribe for its 50.1% pro rata share of the rights issue. 

The company said it wants to enable a more value-accretive and flexible approach to timing of partnerships and divestments related to offshore windfarms; and reinforce its position in the offshore wind market by increasing its financial robustness and flexibility, positioning it to pursue value-accretive investment opportunities in core offshore wind markets in Europe and select markets in APAC.

Ørsted said it continues to progress the previously announced farm-down processes for its Changhua 2 and Hornsea 3 offshore windfarms. In addition, Ørsted has launched a sales process for a potential full divestment of its European onshore business. Ørsted expects to raise more than Dkr35Bn from  divestments in 2025-2026.

Commenting on the company’s interim report for 1H 2025, Mr Errboe said he was satisfied with the company’s strong operational performance, which saw ‘strong earnings’ of Dkr14Bn, supporting Ørsted’s full-year EBITDA guidance of Dkr25-28Bn.

“We continued to make good progress across our entire construction portfolio according to plan, with almost 70% of the offshore wind turbines installed at Revolution Wind and the first foundations installed at Sunrise Wind. In addition, we’ve successfully reached first power at Greater Changhua 2b and 4, which is a significant milestone for the project.

“We maintain our full-year EBITDA guidance of Dkr25-28Bn, excluding earnings from new partnership agreements and impacts from cancellation fees. We have changed the directional guidance for offshore from ‘Higher’ to ‘Neutral’ due to lower wind speeds in the first months of 2025. We maintain our gross investment guidance of Dkr50-54Bn.”

Operating profit (EBITDA) for the first half year amounted to around Dkr16Bn compared to Dkr14Bn in the same period last year. EBITDA excluding new partnerships and cancellation fees in H1 2025 amounted to Dkr14Bn, an increase of 9% compared to the same period last year.