Shares in Orsted plummeted as much as 19 per cent to a record low following the Trump administration’s decision to halt construction of the Revolution Wind offshore wind farm project. The late Friday stop-work order, which cited national security concerns, has jeopardised Orsted’s planned 60 billion-kroner ($14.4 billion) share sale. Orsted is a Danish renewable energy company specialising in offshore wind farm development. It aims to accelerate the transition to green energy through large-scale renewable energy projects.
The setback is the latest in a series of challenges for Orsted, which has already experienced a credit rating downgrade to the lowest investment grade. The company’s shares have fallen by over 40 per cent this year, resulting in a loss of almost $US8 billion ($12 billion) in market value. These difficulties compound concerns surrounding the company’s financial stability and future prospects.
Orsted’s management is scheduled to meet with investors and advisers in London to reaffirm their commitment to proceeding with the planned rights issue despite the growing uncertainty. JPMorgan Chase & Co and Morgan Stanley are among the banks advising Orsted on the offering, which has yet to be formally launched or priced. This meeting is crucial for restoring investor confidence and ensuring the success of the capital raising efforts.
Analysts are already expressing concerns about the impact of recent events on the upcoming rights issue. Ahmed Farman, an analyst at Jefferies International, noted that the situation creates a more challenging environment for the offering, potentially affecting both the issue price and overall investor demand. Donald Trump’s intervention in the Revolution Wind project reflects his long-standing opposition to offshore wind energy development.
