Offshore wind group Orsted sets deep discount for share issue as Trump policies hit US projects

By Stine Jacobsen

COPENHAGEN (Reuters) - Danish offshore wind developer Orsted will offer heavily discounted shares in its $9.42 billion rights issue to raise funds as U.S. President Donald Trump's resistance to renewable energy projects curtails its activities in the United States.

Orsted has expanded rapidly over the past decade through an aggressive financing model, where it has sold stakes in projects under development to help to fund construction and free up capital for new projects. But it has recently faced supply chain disruption, surging interest rates and project delays.

Two thirds of the new capital is earmarked for Sunrise Wind. Potential co-investors had fled the U.S. project after the White House ordered Norway's Equinor to halt a neighbouring wind farm in April. 

OVERALL AMBITION IS FOR A SUCCESSFUL RIGHTS ISSUE

The world's biggest offshore wind developer set the price of its rights issue at 66.6 Danish crowns ($10.46) per share, a 67% discount to Friday's close of 200.3 crowns, or a 39% discount to a weighted price of 109 crowns derived when trading rights are subtracted, according to a prospectus.

"The overall ambition is, of course, to make sure that the rights issue is a success," Orsted finance chief Trond Westlie told Reuters when asked about the subscription price.

"It's consistent with ... transactions done in similar contexts and circumstances, and therefore we believe it's in line with market standards."

Existing shareholders will have the right to buy 2.14 new shares for each share they currently own, with the option to sell their rights if they don't wish to participate.

The company will now review its strategy of selling stakes in projects under development to help to fund construction, Westlie said.

"Farm-downs have been a very profitable way when returns have been good and interest rates low. That has changed," he added.

Orsted's shares lost 1.8% in Copenhagen by 1130 GMT and are down 85% from their January 2021 peak.  

Trading on Monday and Tuesday includes subscription rights, limiting the share price fall, Sydbank analyst Jacob Pedersen said, adding that when these begin to trade separately on Wednesday, the share price will drop sharply.

LAWSUIT OVER STOP-WORK ORDER ON REVOLUTION PROJECT

U.S. officials also issued a stop-work order last month against Orsted's nearly complete Revolution Wind project. The joint venture overseeing it subsequently filed a lawsuit against the administration.

After the rights issue is completed, Orsted will have a liquidity reserve of 145 billion Danish crowns, which the CFO said would be sufficient to complete its current projects.

Orsted has 420 million shares outstanding and plans to add 901 million new shares in the rights issue.

The company's biggest shareholders, the Danish government with 50.1%, Equinor with 10% and Andel A.M.B.A with 5%, have said they will participate in the share issue, which closes on October 2, with trading in the new shares expected to start on October 10.

The sale of the remaining shares is fully underwritten by a group of banks.

($1 = 6.3661 Danish crowns) 

(Reporting by Stine Jacobsen; Additional reporting by Terje Solsvik, Jacob Gronholt-Pedersen and Soren Jeppesen; Editing by Kirsten Donovan and David Goodman)