Equinor to Secure 10% Stake in Ørsted through Shares Purchase during Rights Offering

Equinor, the Norwegian energy company, has announced its intention to participate in Ørsted's EUR 8 billion rights issue, maintaining its 10% ownership stake in the Danish wind energy developer. This decision comes following Ørsted's announcement on 11 August regarding the planned rights issue with pre-emptive rights for existing shareholders.

The rights issue is aimed at providing the necessary strengthening of Ørsted's capital structure to execute its business plan, considering the impact of regulatory uncertainty on its US offshore wind portfolio. The Danish state, Ørsted's majority shareholder, has committed to subscribing to its share of the company (50.1%). A syndicate of banks has been appointed to jointly underwrite the rights issue for the approximately 49.9% that would not be subscribed to by the Danish state.

The banks involved in the syndicate have not been publicly disclosed in detail, but typically include major international and Danish investment banks selected by Ørsted for such purposes. Equinor, on the other hand, plans to subscribe for new shares at a consideration of up to DKK 6 billion (around USD 939 million or EUR 800 million).

The funds from the rights issue will be primarily used to fund the construction of the Sunrise Wind offshore wind farm in the US, a project that requires approximately DKK 40 billion (around EUR 5.4 billion) to complete entirely on Ørsted's balance sheet.

Equinor's decision to participate in the rights issue is driven by the belief that a closer industrial and strategic collaboration between Ørsted and Equinor can create value for all shareholders in both companies. This collaboration is expected to extend beyond the rights issue, as Equinor has also nominated a candidate to Ørsted's board of directors ahead of the next annual general meeting.

This news comes after Equinor faced a similar challenge earlier this year with its Empire Wind 1 project, where the order was rescinded around a month after it was issued, following discussions between the New York Governor and the White House. Equinor is following recent developments around the offshore wind industry in the US closely and will remain in dialogue with Ørsted as the situation evolves.

The stop-work order for Revolution Wind, another offshore wind project in the US, highlights increased regulatory uncertainty for offshore wind in the US. This uncertainty is a concern for both Equinor and Ørsted, as they continue to invest in and develop projects in the US market.

In conclusion, Equinor's participation in Ørsted's rights issue underscores its commitment to the strategic partnership between the two companies and its belief in the potential of the US offshore wind market, despite the regulatory challenges it presents.