Orsted Faces Investor Scrutiny Ahead of $9.4 Billion Share Sale

URGENT UPDATE: Orsted A/S is ramping up efforts to reassure investors following a shocking 16% plunge in its stock price after the Trump administration halted construction on a major wind-power project in the US. The $9.4 billion share sale is now under intense scrutiny as executives meet with shareholders in London today to address growing concerns.

The company’s share price fell to a record low in Copenhagen, reducing its market valuation to 75.3 billion kroner (approximately $11.8 billion). This alarming drop has raised questions about the viability of Orsted’s upcoming rights offering of 60 billion kroner, signaling troubling times for the renewable energy giant.

The US Bureau of Ocean Energy Management announced on Friday that it would block the construction of the Resolution Wind project, which is currently 80% complete off the coast of Rhode Island. This decision has sparked fears that Orsted may also struggle to sell a stake in its other significant project, the Sunrise Wind farm near New York.

According to analyst Emil Haargaard of DNB Carnegie, if Orsted is forced to abandon both projects, cancellation fees could soar to about 12 billion kroner. While such a drastic outcome remains unlikely, the uncertainty surrounding these projects places the entire share sale at risk. “A rights issue of this scale requires materially reduced uncertainty and improved visibility on US execution risk,” Haargaard stated.

Orsted, a long-standing player in the renewable energy sector, has encountered challenges replicating its European success in the US market. The Trump administration’s policies, particularly its opposition to wind energy, have compounded these issues. A recent court filing revealed efforts to halt another offshore wind farm near Maryland, further illustrating the precarious nature of Orsted’s US ambitions.

Investors are now left wondering how Orsted will navigate these tumultuous waters and the timeline for any potential resolutions. However, there is a glimmer of hope; President Trump recently reversed a previous decision to stop construction on another offshore project, Equinor ASA’s Empire Wind in New York, after a deal allowing new natural gas pipelines was struck. Connecticut Governor Ned Lamont also hinted at possible negotiations, stating that there’s a “deal to be had.”

The rights offering is being organized by a group of financial heavyweights, including BNP Paribas SA, Danske Bank A/S, JPMorgan Chase & Co., and Morgan Stanley. As these negotiations unfold, all eyes will be on Orsted to see if they can stabilize their operations and restore investor confidence in a rapidly changing regulatory environment.

With critical developments occurring, stakeholders are urged to watch closely as Orsted navigates this challenging landscape. The outcome of today’s meetings in London could be pivotal for the company’s future in the US market.