By Jacob Gronholt-Pedersen and Soren Jeppesen
COPENHAGEN (Reuters) -Shares in Orsted plunged to a record low on Monday as the wind farm developer asked shareholders for $9.4 billion to help fund a U.S. project, after potential partners were put off by U.S. President Donald Trump’s hostility to wind power.
The 60 billion crowns ($9.4 billion) rights issue is worth around half of the Danish company’s market value as of Friday’s close.
Struggling in recent years with soaring inflation and logistical problems that sent costs soaring, the offshore wind industry faced a further setback when Trump suspended licensing on his first day back in office in January.
“Orsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years’ macroeconomic and supply chain challenges,” said CEO Rasmus Errboe.
Trump campaigned on a promise to end the offshore wind industry, saying it is too expensive and hurts whales and birds.
Orsted said two-thirds of the new capital would be used to fund the construction of Sunrise Wind – one of its two remaining projects under development off the U.S. East Coast.
Potential co-investors for the project pulled out after Trump’s administration in April ordered Equinor to halt the development of a neighbouring fully-permitted wind farm. The order, which sent shockwaves through the industry, was reversed the following month, however.
“Following the stop work order on Equinor’s Empire Wind project, the perceived risks of the U.S. offshore wind market among investors and banks increased significantly,” Errboe said.
Orsted depends on selling full or partial stakes in its offshore wind farms to finance new projects. Errboe, who replaced former CEO Mads Nipper earlier this year, has sought to cut costs and cancelled projects in the U.S. and Britain.
The rest of the expected proceeds from the rights issue would strengthen Orsted’s finances and help it develop the 8.1 gigawatts of offshore wind projects currently under construction by 2027, the company said.
Orsted shares lost nearly one-third of their value to hit a record low. At 1327 GMT, they were down 31.2% at 212 crowns.
“The U.S. offshore wind market was crippled after Trump took office. But things started going badly for Orsted before Trump,” said Sydbank analyst Jakob Pedersen.
‘THE ONLY OPTION’
Orsted has, in recent years, scrapped some U.S. projects and booked hefty impairments due to supply chain delays, inflation and shifting subsidy policies in the nascent U.S. offshore wind market.
