Orsted Rights Issue: Discounted Shares and US Policy Hurdles Shake Investors
In order to raise money for its $9.42 billion rights issue, Danish offshore wind producer Orsted will sell shares at steep discounts. This action comes as Orsted’s operations in the US are being curtailed due to US President Donald Trump’s opposition to renewable energy initiatives.
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
Orsted Cuts Share Price in Rights Issue
The prospectus states that the price per share of the largest offshore wind energy developer in the world is 66.6 Danish kroner (10.46 USD). This price is 39% lower than the weighted price of 109 kroner that was achieved after trading rights were removed and 67% lower than Friday’s closing price of 200.3 kroner. For every share they presently possess, current shareholders who supported the capital raising earlier this month will be eligible to purchase 2.14 additional shares. Those who choose not to take part, however, can sell their rights to third parties.
Will Orsted Overcome Rising Interest Rates and Global Supply Chain Challenges?
Building on its aggressive growth strategy, Orsted is currently confronted with increasing hurdles as project costs are driven up by rising interest rates and disruptions in the global supply chain. Important offshore wind farms’ schedules are in jeopardy due to these delays, which could affect anticipated cash streams. Although the company’s funding mechanism has enabled its quick expansion, analysts point out that maintaining investor confidence will depend on how well it handles these challenges.
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