Despite current challenges, Equinor still believes in the long-term prospects of offshore wind and will take part with $939 million in the $9.4-billion rights issue of the world’s offshore wind developer Ørsted, in which the Norwegian energy major holds 10%.
Ørsted last month announced plans for a $9.4 billion (60 billion Danish crowns) rights issue to raise capital from existing shareholders as challenges for the industry continue to mount.
Ørsted plans a rights issue with pre-emptive rights for existing shareholders amid “an extraordinary situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges,” the Danish company said in early August.
Following dialogue with Ørsted, Equinor has decided to support the proposal for the rights issue to strengthen Ørsted’s balance sheet in response to industry challenges, the Norwegian oil and gas major said on Monday.
Equinor, which holds 10% in Ørsted, intends to participate in the rights issue and maintain its ownership share. This support reflects “confidence in Ørsted’s underlying business, and the competitiveness of offshore wind in the future energy mix, in selected geographies,” the Norwegian company said.
Ahead of the next annual general meeting, Equinor will also nominate a candidate to Ørsted’s board of directors.
Equinor expects consolidation and new business models to emerge from the current challenges in the industry, and believes that a closer industrial and strategic collaboration between Ørsted and Equinor can create value for all shareholders in both companies.
Subject to the final terms of Ørsted’s rights issue, Equinor will subscribe for new shares of up to 6 billion Danish crowns, or around $939 million.
The company also follows closely the recent developments around the offshore wind industry in the U.S. and will remain in dialogue with Ørsted as the situation evolves, Equinor said today, after Ørsted was issued a stop-work order on a nearly completed project from the U.S. Administration.
Equinor faced similar problems in the U.S. earlier last year, when the Trump Administration first halted, but a mother later allowed the Empire Wind 1 project offshore New York to continue.
By Tsvetana Paraskova for Oilprice.com
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