Orsted Moves Forward with $9.4 Billion Share Sale Amid Crisis

UPDATE: Orsted A/S is pressing ahead with a massive $9.4 billion share sale as the company grapples with a deepening crisis following a controversial halt on its Revolution Wind project. This urgent decision comes after the Trump administration ordered a stop-work on the nearly completed offshore wind farm, causing the company’s stock to plunge dramatically.

The halt was enacted on August 11, exacerbating fears for Orsted as it seeks to raise 60 billion Danish kroner from investors, with half of that funding expected from Danish taxpayers. This share sale is slated to be the largest in the European energy sector in over a decade, a critical move for a company facing a significant credibility crisis.

Orsted’s Revolution Wind project, valued at approximately $4 billion according to Jefferies International Ltd., is currently around 80% complete. However, the unexpected intervention from the federal government raises questions about the future of this significant investment. Investors are concerned about whether Orsted can negotiate a resolution with the government or if the company will ultimately abandon the project, which could result in a massive financial write-down.

A company statement emphasized that the rights issue is designed to bolster Orsted’s capital structure despite ongoing uncertainties that threaten its U.S. offshore wind portfolio. The situation has already led to a credit rating downgrade for Orsted, marking a troubling chapter in its efforts to replicate its European success in the American market.

The halt on Revolution Wind is not an isolated incident. Earlier in the year, President Trump had also suspended construction on another offshore wind farm, Empire Wind, before reversing that decision after negotiations with New York Governor Kathy Hochul. Now, Connecticut Governor Ned Lamont and Rhode Island officials are working to amend the recent stop-work order, arguing that it contradicts the administration’s previous commitments to renewable energy and threatens to increase electricity costs for consumers.

Analysts express skepticism about Orsted’s potential to navigate this turbulent landscape. Jacob Pedersen, head of equity research at Sydbank A/S, warns that the company could face double-digit billion write-downs if the situation deteriorates further. The uncertainty surrounding the Revolution Wind project has already hampered Orsted’s plans to sell a stake in its Sunrise Wind project, prompting the urgent need for additional capital.

The U.S. Department of Interior’s Bureau of Ocean Energy Management has highlighted national security concerns during its review of Revolution Wind, which compounds the challenges Orsted faces as it seeks to advance its interests in the U.S. market. The administration’s recent actions signify a broader strategy to curtail the growth of offshore wind farms, a sector that President Trump has openly criticized.

Orsted’s leadership remains hopeful. The company is exploring all avenues, including potential legal action, to expedite resolution discussions with permitting agencies. Despite the setbacks, analysts believe that abandoning the project is unlikely, given its advanced development stage.

As Orsted prepares for its rights issue, investors are watching closely. The outcome of these negotiations and the company’s ability to navigate this crisis will be pivotal not only for its future but also for the broader offshore wind industry, which is critical to transitioning to sustainable energy.

Stay tuned for updates as this story develops.