Equinor Commits $940M to Orsted, Secures 10% Stake Amid Crisis

BREAKING: Equinor ASA has just announced its commitment to support wind developer Orsted A/S by subscribing to new shares, ensuring it retains its 10% stake in the company. This move comes as Orsted navigates a turbulent financial landscape, with a proposed 60 billion kroner (approximately $9.4 billion) share sale aimed at stabilizing its operations.

This urgent backing from Equinor marks its position as the first major investor to support Orsted following the Danish government’s endorsement. The $940 million investment underscores Equinor’s confidence in Orsted’s business model and the future potential of offshore wind energy, particularly in key markets.

In recent weeks, Orsted has faced significant challenges, including a halt in operations by the Trump administration on a vital offshore wind project, causing its stock to plummet to record lows. Top executives from Orsted recently engaged with shareholders in London and Frankfurt to bolster support for the share offering, which is crucial for the company’s recovery.

With Equinor’s backing now confirmed, Orsted has secured at least 60% of shareholder support, including the Danish government’s majority stake. This development is expected to restore confidence among other investors as they prepare for an extraordinary general meeting scheduled for Friday, where management will seek authorization for the share sale.

Orsted aims to finalize the share offering process by the first half of October 2023, with a detailed prospectus and pricing expected shortly after the meeting. In conjunction with this financial maneuver, Equinor will nominate a candidate for Orsted’s board of directors ahead of its upcoming annual general meeting.

Last year, discussions between Equinor and Orsted regarding a potential merger were explored but did not advance. However, Equinor continues to emphasize the need for collaboration in the offshore wind sector. “In response to the challenges facing offshore wind, the industry will see consolidation and new business models,” Equinor noted.

As the situation develops, investors and stakeholders are watching closely. The commitment from Equinor not only provides immediate financial support for Orsted but also signals a potential shift in the dynamics of the renewable energy sector, paving the way for future partnerships that could reshape the industry landscape.

Stay tuned for further updates as Orsted prepares for its critical extraordinary general meeting and the impending share sale.