Orsted continues share issue as it looks to salvage €3.4bn US wind farm plan

Orsted will continue with plans to sell shares as it tries to contain a growing crisis that worsened after US president Donald Trump’s administration ordered construction to halt on an almost-finished offshore wind farm.

Orsted will continue with plans to sell shares as it tries to contain a growing crisis that worsened after US president Donald Trump’s administration ordered construction to halt on an almost-finished offshore wind farm.

The value of the company plunged on August 11 after an announcement for plans to raise some 60 billion Danish kroner (€8bn) from investors, half of which will come from Danish taxpayers. It would be the biggest share sale for the European energy sector in over a decade.

The stop-work order, that came on Friday, is for Revolution Wind a project that’s costing $4bn (€3.4bn) to build, according to an estimats. It’s the latest in a string of bad news for Orsted that led to a credit rating downgrade to the lowest investment grade.

Investors want to know whether the company can find an agreement to appease the US government and how long that could take, or if it will walk away from the project and how much it would cost. The uncertainty could damage investor interest in a rights issue.

“The planned rights issue has been sized to provide the required strengthening of Orsted’s capital structure to execute its business plan, even when taking into account the impact of this uncertainty on Orsted’s US offshore wind portfolio,” the company said in a statement.

In Ireland, Orsted has invested €800m and is headquartered in Cork, with almost 30 wind farms in operation or development, along with two solar farms. For Orsted, one of the world’s largest offshore wind developers, the order marks a new low point in the company’s failed effort to replicate its European business in the American market. In recent years, a variety of issues including costly supply chain bottlenecks have forced the company to cancel two major projects, issue a series of writedowns and led to the replacement of its top executives.

“Orsted is evaluating all options to resolve the matter expeditiously in dialogue with permitting agencies and potentially through legal proceedings, with the aim being to proceed as quickly as possible,” the company said.

Earlier this year, Trump halted construction of another US offshore wind farm, Equinor ASA’s Empire Wind but reversed it after reaching a deal with New York governor Kathy Hochul that could allow new natural gas pipelines to be built in the state.

Orsted will be hoping to do something similar. The governors of Connecticut and Rhode Island said they are working to amend the decision.