Ørsted Plans Rights Issue to Fund Building US Offshore Wind Farm Alone, Danish State Commits as Majority Subscriber

Ørsted plans to launch a rights issue with pre-emptive rights for existing shareholders to raise DKK 60 billion (around EUR 8 billion) in gross proceeds, most of which will go to funding the construction of the Sunrise Wind offshore wind project in the US, which the company cannot partially divest at this time as per its usual business model. The Danish state, Ørsted’s majority shareholder, has committed to subscribe for its 50.1 per cent pro rata share of the planned rights issue.

According to Bloomberg, Ørsted’s shares dropped 29 per cent after the company announced the proposed rights issue on 11 August.

“Following the recent material adverse development in the US offshore wind market, it is not possible for Ørsted to complete the planned partial divestment and associated non-recourse project financing of its Sunrise Wind offshore wind project on terms which would provide the required strengthening of Ørsted’s capital structure in order to support the company’s investment programme and business plan”, the company said.

Without the partial divestment of Sunrise Wind and the associated project financing, Ørsted needs to fund the construction of the entire 924 MW offshore wind project on its balance sheet, which requires an incremental funding of approximately DKK 40 billion (around EUR 5.4 billion), according to the developer.

The remainder will be used “to support a robust capital structure”, including providing financial flexibility for Ørsted’s future investments.

To raise new equity capital of DKK 60 billion in gross proceeds via the rights issue, Ørsted will give its existing shareholders a pre-emptive right to subscribe for their respective pro rata share of the capital increase and thereby retain the same relative ownership they hold now.

“The Danish state has undertaken towards Ørsted to subscribe for its 50.1 per cent pro rata share of the Rights Issue. Any shares not subscribed for by the existing shareholders by exercising their pre-emptive right or by other eligible investors are fully underwritten by Morgan Stanley & Co. International plc to provide certainty that the Rights Issue will be completed”, the company said in the announcement.

Ørsted will hold an extraordinary general meeting in September to seek approval for the rights issue.

The Sunrise Wind project was owned by Ørsted and Eversource, which decided to exit the offshore wind projects in the US in 2022 and started the process the following year. In July 2024, Ørsted acquired Eversource’s stake in the project and became its sole owner.

Ørsted and Eversource, still the project co-owner at the time, took the final investment decision (FID) on Sunrise Wind in March 2024, setting the stage for the onshore construction to start. The US Bureau of Ocean Energy Management (BOEM) approved Sunrise Wind’s construction and operations plan (COP) in June last year.

According to information shared earlier, offshore construction is expected to start this year.

Located approximately 30 miles (about 48 kilometres) east of Montauk, the 924 MW Sunrise Wind is scheduled to go into operation in 2026 and power nearly 600,000 New York homes.

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