Orsted will look to raise DKK60bn (€8bn) through a rights issue, backed by the Danish State as majority shareholder, after abandoning plans to partially divest its Sunrise Wind offshore wind farm in the US.
The developer said the move follows “material adverse” developments in the US offshore wind market that made it impossible to conclude the planned partial sale and associated non-recourse project financing on terms that would strengthen its balance sheet.
Chief executive Rasmus Errboe later told analysts efforts to line up banks and equity investors floundered after the Trump administration issued a since-lifted stop-work order against Equinor’s Empire Wind project in April.
Until that, the debt package for Sunrise was oversubscribed and negotiations with equity partners were underway, he said.
The April stop-work order issued to Equinor “significantly increased the perceived risk surrounding offshore wind in the US among investors and among banks”, Errboe told reporters on a call following the investor presentation.
“This extraordinary and unprecedented situation means that we are faced with a funding requirement that has to be met,” Errboe said, while stressing that construction on Sunrise Wind is progressing according to schedule.
Under the rights issue, existing shareholders will have pre-emptive rights to maintain their current ownership, with the Danish State committing to take up its full 50.1% entitlement, the developer said.
Any unsubscribed shares will be fully underwritten by Morgan Stanley & Co. International plc to ensure the raise is completed, it added.
The proceeds will be used to strengthen Ørsted’s capital structure through to 2027 and give it the flexibility to deliver its 8.1GW offshore wind construction portfolio while maintaining an investment-grade credit rating, the company stated.
The package is also intended to cover incremental funding needs from taking full ownership of Sunrise Wind, preserve and optimise the value of operational and under-construction assets, and give the company more control over the timing of farm-downs and partnerships.
Ørsted’s chair Lene Skole said: “Given the unprecedented regulatory development in the US, we have made a comprehensive assessment of all options, and Ørsted’s 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 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.
“This will be the foundation for generating long-term value from Ørsted’s platform and capabilities, for the benefit of our shareholders and other stakeholders.
“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.”
Group president and chief executive Rasmus Errboe said that while long-term fundamentals for offshore wind “remain strong” in Europe, the industry faced exceptional headwinds.
“Orsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges,” he said.
“To deliver on our business plan and commitments in this environment, we’ve concluded that a rights issue is the best solution for Orsted and our shareholders. The rights issue will reinforce our ability to realise the full value potential of our existing portfolio and capture future value-creating opportunities in offshore wind.
“At a critical time when we’re constructing 8.1GW of offshore wind capacity and making good progress across our entire construction portfolio, the rights issue will ensure a capital structure, which supports a solid investment-grade credit rating and a more robust Ørsted.”
Errboe added that the company would maintain a “disciplined focus on value-creating opportunities, predominantly within offshore wind and primarily in Europe” and said governments in key markets had “clear build-out targets for offshore wind as a cornerstone to becoming energy independent, decarbonising their economies, and ensuring competitiveness through affordable energy”.
“With over 30 years of experience within offshore wind and a position as a global market leader, Orsted will be able to support this development from a position of strength,” he said.
The collapse of the Sunrise Wind partial divestment means Orsted will have to finance the entire project on balance sheet, creating an incremental funding requirement of about DKK40bn.
The company is also increasing its total planned investment from DKK130bn to DKK145bn for 2025–2027 to reflect higher ownership of the US project and increased costs from tariff rises.
The developer is continuing its divestment programme, progressing farm-downs of the Changhua 2 and Hornsea 3 offshore wind farms and launching the sale of its European onshore wind and solar business.
Errboe said that the capital raise gives Orsted increased flexibility on its ongoing farm-downs, as well as potential future project divestments.
It expects to raise more than DKK35bn from asset sales over 2025–2026.
Orsted has also updated its medium-term financial targets. It expects EBITDA, excluding new partnerships and cancellation fees, to exceed DKK28bn in 2026 and DKK32bn in 2027. Return on capital employed is projected at around 11% on average from 2025 to 2027, rising to over 13% in 2028–2030.
The company remains committed to a solid investment-grade credit rating and plans to reinstate dividends for the 2026 financial year.
Orsted said the rights issue would allow it to preserve and optimise the value of its operational and construction portfolio, adopt a more flexible approach to timing farm-downs, and be ready to pursue the most value-accretive opportunities in core offshore markets in Europe and selected Asia-Pacific regions.
An extraordinary general meeting will be held on 5 September to seek shareholder approval for the capital raise.
“It is a buyer’s market, as we have said before,” Errboe told reporters, and added that the company remains fully committed to the build campaigns on Sunrise Wind and the 704MW Revolution Wind.
Errboe said that a substation foundation deemed unsuitable because of resistance in the seabed soil had been successfully removed in the past quarter, and would be replaced in the quarter to come.
Elsewhere in the developer’s construction portfolio, Errboe said that Orsted’s Changhua 2b and 4 project in Taiwan was experiencing a slight delay stemming from problems with the inter array cables.
He said that root cause is related to the cabling vessel.
“We will adjust the vessel set-up to fully reflect the current in the Taiwan straight and also some challenges with the existing vessel,” Errboe said, and emphasised that the installation delay will not have any meaningful impact on the business case.
Orsted intends to commission the wind farm in the first half of next year.