Capital boost update for Ørsted: Shares facing renewed pressure
Ørsted, the Danish energy company, has announced plans for a significant capital increase to address a financing gap created by the failed partial sale of the US offshore wind farm "Sunrise" and the construction stop imposed by the US government on the project.
The company aims to raise around 60 billion Kroner (approximately eight billion Euros) through the issuance of around 900 million new shares at a price of 66.60 Kroner per share. Existing shareholders will have a subscription ratio of 15:7, meaning they will receive 15 subscription rights for each existing share, with seven needed to acquire a new share. The subscription period runs from September 19 to October 2.
The Danish state and Norwegian energy company Equinor have pledged their support for Ørsted's capital increase. However, the third largest shareholder of Ørsted, who has not yet declared support for the planned capital increase, remains unnamed at this time.
The funds raised from the capital increase will be used to fill the financing gap created by the failed partial sale of the US offshore wind farm "Sunrise". This comes after the US government imposed a construction stop on the Ørsted project off the coast of New York and the advanced "Revolution Wind" project off Rhode Island at the end of August.
Despite receiving green light from the majority of its shareholders for the capital increase, Ørsted must regain the trust of the capital market. The market value of Ørsted has fallen by almost 40 percent to around 82 billion Kroner since the announcement of the capital increase in August. On Monday, Ørsted shares fell to 185 Danish Kroner in early trading.
However, by midday, the stock had recovered and was trading just slightly below its opening price. Investors are waiting on the sidelines for Ørsted, hoping for a sign of stability and growth in the company.
As Ørsted navigates these challenging times, it is clear that the road to regaining the trust of the capital market will be a long one. The company's focus on renewable energy and its commitment to sustainable development remain key strengths, and with the right strategy and execution, Ørsted may yet emerge stronger from this period of uncertainty.
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