Equinor has opted to participate in Orsted’s €8bn rights issue aimed at plugging a funding gap on the 924MW Sunrise Wind project in the US.
Following dialogue with Orsted, Equinor has decided to support the proposal to strengthen Orsted’s balance sheet in response to the current industry challenges.
Orsted announced last month that it will look to raise DKK 60bn (€8bn) through a rights issue, backed by the Danish State as majority shareholder, after abandoning plans to partially divest the Sunrise offshore wind project.
It came after the Trump administration’s stop-work order on Equinor’s Empire Wind project in April – which has since been lifted – generated uncertainty for investors.
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.
As a long-term industrial shareholder, Equinor intends to participate in the rights issue and maintain its 10% ownership share in Orsted.
Ahead of the next annual general meeting, Equinor will also nominate a candidate to Orsted’s board of directors.
Equinor said its support of the rights issue reflects confidence in Orsted’s underlying business, and the competitiveness of offshore wind in the future energy mix, in selected geographies.
In a press release, the company stated: “Equinor believes that a closer industrial and strategic collaboration between Orsted and Equinor can create value for all shareholders in both companies.
“Equinor is following recent developments around the offshore wind industry in the US closely and will remain in dialogue with Orsted as the situation evolves.”
Subject to the final terms of the rights issue, Equinor will subscribe for new shares at a consideration of up to DKK 6bn, or around USD 939m, based on a USD/DKK exchange rate of 6.39.
Equinor’s offshore wind portfolio consists of 0.4GW net installed capacity, and a further 3GW under development.
The current focus is on completing the ongoing development projects in northwest Europe and Empire Wind 1 in the US.