Norway’s Equinor pledged on Monday to support Orsted’s planned $9.4 billion rights issue as the struggling Danish offshore wind developer seeks to bolster its balance sheet in the face of US resistance to wind power.
The move by the Norwegian energy group, in which the state owns a 67 per cent stake, signals its ambition to strengthen ties with Orsted as both companies navigate regulatory hurdles in the US offshore wind market.
“In response to the challenges facing offshore wind, the industry will see consolidation and new business models,” Equinor said in a statement.
“Equinor believes that a closer industrial and strategic collaboration between Orsted and Equinor can create value for all shareholders in both companies,” it added.
Orsted will ask shareholders at an extraordinary general meeting on Friday to approve the capital raise, citing “material adverse developments” in the US sector.
Equinor, which holds a 10 per cent stake in Orsted, said it plans to subscribe for new shares worth up to six billion Danish crowns ($940 million) and expressed confidence in Orsted’s business and the competitiveness of offshore wind energy.
Equinor also plans to nominate a candidate to Orsted’s board ahead of its next annual general meeting.
The US Bureau of Ocean Energy Management (BOEM) last month issued a work-stop order for Orsted’s $1.5 billion Revolution Wind project, which was 80 per cent complete, marking its second major suspension of an offshore wind project this year.
BOEM previously halted Equinor’s Empire Wind 1 project off New York in April.
Equinor said it was monitoring the situation in the US closely and will remain in dialogue with Orsted as developments unfold.
Despite the US setback, Orsted, which is 50.1 per cent owned by the Danish state, reiterated plans for the rights issue, and the Danish finance ministry has confirmed its commitment to participate.
(Reporting by Stine Jacobsen; Editing by Anna Ringstrom and Joe Bavier)
