Shares in Orsted A/S stock fell as much as 19 percent to a record low after US President Donald Trump’s administration blocked construction of an almost-finished offshore wind farm, throwing a wrench into a planned 60 billion kroner (US$9.4 billion) share sale backed by the Danish government.
The Danish wind company’s management is meeting with investors and advisers in London today to reassure them that a growing crisis is under control and that the planned rights issue will go ahead. Orsted has yet to formally launch or price the offering and is being advised by banks including JPMorgan Chase & Co and Morgan Stanley.
Orsted declined as much as 19 percent in Copenhagen yesterday. Shares are down almost 50 percent this year, wiping nearly US$8 billion off the company’s value.
Photo: Nichlas Pollier, Bloomberg
The events mark the latest push by the Trump administration to halt the expansion of offshore wind farms, an energy source that the US president personally dislikes. Those efforts have included stopping new leases on sites and permits for new offshore wind farms and rolling back tax credits that support projects.
“We expect all of this to create a more challenging setup for the upcoming rights issue regarding issue price and investor demand,” Jefferies International Ltd analyst Ahmed Farman said in a note.
Friday’s stop-work order is for Revolution Wind off the coast of Rhode Island — a project that’s costing US$4 billion to build, according to an estimate by Jefferies. It’s the latest in a string of bad news for Orsted that led to its credit rating being cut to the lowest investment grade.
Investors want to know whether the company can find an agreement to appease the government and how long that could take, or if it will be forced to abandon the project and how much it would cost. The uncertainty could damage investor interest in the rights issue or mean the Danish government needs to increase its stake in the company even further.
The company tried to reassure investors yesterday that plans are going ahead.
“The planned rights issue has been sized to provide the required strengthening of Orsted’s capital structure to execute its business plan, even when taking into account the impact of this uncertainty on Orsted’s US offshore wind portfolio,” the company said in a statement.
The Danish government, which owns 50.1 percent of Orsted, still plans to take part in the capital raise, saying it had accounted for the risk when deciding on the matter.
“I can confirm the state’s continued backing,” Danish Finance Minister Nicolai Wammen said in an e-mailed statement yesterday, just as opposition parties resumed calls for the government to sell its stake.
It would be the biggest share sale for the European energy sector in over a decade, with the government planning to buy about half of the securities.
For Orsted, one of the world’s largest offshore wind developers, the order marks a new low point in the company’s failed effort to replicate its European business in the American market. In recent years, a variety of issues including costly supply chain bottlenecks have forced the company to cancel two major projects, issue a series of writedowns and led to the replacement of its top executives.
“Orsted is evaluating all options to resolve the matter expeditiously in dialogue with permitting agencies and potentially through legal proceedings, with the aim being to proceed as quickly as possible,” the company said.
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
FORESEEABLE CONSEQUENCES: New technology always comes with new innovations by the iniquitous in exploiting users for financial gain or more nefarious ends Artificial intelligence (AI) “agents” say they can save users time and energy by automating tasks, but the growing power of systems such as OpenClaw is putting cybersecurity experts on edge. Powered by a wave of hype, OpenClaw today says it has more than three million users worldwide. The system allows users to create so-called agents, tools based on a large language model (LLM) such as OpenAI’s ChatGPT or Anthropic PBC’s Claude, that can carry out online tasks. “We’ve moved from an AI you could talk with via a chatbot to an agentic AI, which can take action... the threat and the risks are
RSS