Summary
- Equinor supports Orsted’s rights issue
- Will subscribe for shares worth up to $941 million
- Says it sees value in strategic collaboration with Orsted
- Will nominate candidate to Orsted’s board
- Orsted shares rise 4.7%
COPENHAGEN/OSLO, Sept 1 (Reuters) – Norway’s Equinor will pump nearly $1 billion into Orsted’s emergency fundraising it said on Monday, bolstering the Danish offshore wind power developer’s efforts to cope with U.S. President Donald Trump’s hostility to the sector.
The energy company said it planned to participate in Orsted’s 60-billion Danish crown ($9.4 billion) rights issue by subscribing for new shares worth up to 6 billion crowns. It will maintain its 10% stake in the company, it added, helping remove some uncertainty for the offshore wind farm developer.
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Shares in Orsted, which tumbled to record lows after the company’s surprise announcement in August of the capital raise and are down 85% since their 2021 peak, rose as much as 4.7% on the Equinor news.
Separately, Norway’s sovereign wealth fund, which holds around 3% of shares in Orsted, said it would vote in favour of the capital raise at an extraordinary meeting of shareholders on September 5.
Equinor, which is 67%-owned by the Norwegian state, is the second-biggest shareholder in Orsted. The Danish state, which holds just over 50% of Orsted, has already confirmed its commitment to participate.
“In response to the challenges facing offshore wind, the industry will see consolidation and new business models,” Equinor said in a statement, adding it seeks “closer industrial and strategic collaboration” with Orsted.
The offshore wind industry, which has struggled in recent years with soaring inflation and logistical problems that sent costs soaring, faced a further setback when Trump suspended licensing on his first day back in office in January. His administration has also stymied some developments, including a temporary halt in April to an Equinor project off New York.
Analysts said Equinor had little choice but to participate in Orsted’s capital raise as sitting out would dilute its stake. RBC analysts described it as being “between a rock and a hard place”.
Equinor, which has said the purchase of its stake in Orsted was a long-term bet on the sector, plans to nominate a candidate to Orsted’s board ahead of its next annual general meeting.
($1 = 6.3751 Danish crowns)
Reporting by Stine Jacobsen in Copenhagen and Nora Buli and Nerijus Adomaitis in Oslo, additional reporting by Soren Jeppesen; Editing by Anna Ringstrom, Joe Bavier, Jacob Gronholt-Pedersen and Emelia Sithole-Matarise
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