Norwegian energy major Equinor is investing nearly $1bn of capital into Danish renewable energy company Ørsted, after the company came under pressure from the Trump administration’s clampdown on offshore wind.
Ørsted last month announced plans for a 60bn DKK ($9.38bn) rights issue to raise capital from existing shareholders as challenges for the industry continue to mount.
At the time of the decision, the Danish firm revealed that it was made amid “an extraordinary situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges”.
Following dialogue with Ørsted, Equinor decided to support the proposal to strengthen Ørsted’s balance sheet in response to the current industry challenges.
Subject to the final terms of the rights issue, Equinor will subscribe for new shares at a consideration of up to DKK 6bn, or around $939m.
The Norwegian firm stated that it would be participating in the rights issue and maintain its 10% ownership share in Ørsted. Ahead of the next annual general meeting, Equinor will also nominate a candidate to Ørsted’s board of directors.
Equinor believes that a closer industrial and strategic collaboration between Ørsted and Equinor can create value for all shareholders in both companies in response to the challenges facing offshore wind in recent times.
Equinor’s offshore wind portfolio consists of 0.4GW net installed capacity and a further 3GW under development. The current focus is on completing the ongoing development projects in northwest Europe and Empire Wind 1 in the US.
Last week, the Trump administration ordered Ørsted to stop construction of the nearly completed $4bn Revolution Wind offshore wind farm.
