Danish offshore wind developer Orsted, will offer heavily discounted shares in its $9.42 billion rights issue to raise funds as U.S. President Donald Trump's resistance to renewable energy projects curtails its activities in the United States.
Orsted has expanded rapidly over the past decade through an aggressive financing model, where it has sold stakes in projects under development to help fund construction and free up capital for new projects. But it has recently faced supply chain disruption, surging interest rates and project delays.
Two-thirds of the new capital is earmarked for Sunrise Wind, a U.S. project that saw potential co-investors flee after the White House ordered Norway's Equinor to halt a neighbouring wind farm in April.
"We intend to raise capital to cover the additional funding requirement related to Sunrise Wind and create a robust financial foundation for Orsted to realise the potential of our business," the company said in a statement on Monday.
The world's biggest offshore wind developer set the price of the issue at 66.6 Danish crowns ($10.46) per share, a 67% discount to Friday's close of 200.3 crowns or a 39% discount to a weighted price of 109 crowns derived when trading rights are subtracted, according to a prospectus.
Existing shareholders, who approved the capital raise earlier this month, will have the right to buy 2.14 new shares for each share they currently own. However, those who do not wish to participate can sell their rights to others.
Orsted's shares traded 0.7% lower in Copenhagen at 0940 GMT, and are down 85% from a January 2021 peak.
Trading on Monday and Tuesday includes subscription rights, limiting the share price fall, Sydbank analyst Jacob Pedersen said, adding that when these begin trade separately on Wednesday, the share price will drop sharply.
U.S. officials also issued a stop-work order last month against Orsted's nearly complete Revolution Wind project. The joint venture overseeing it subsequently filed a lawsuit against the administration.
Orsted currently has 420 million shares outstanding and plans to add 901 million new shares in the rights issue.
The company's biggest shareholders, the Danish government with 50.1%, Equinor, with 10% and Andel A.M.B.A with 5%, have said they will participate in the share issue, which closes on October 2, with trading in the new shares expected to start on October 10.
The sale of the remaining shares is fully underwritten by a group of banks.
