Orsted said on Monday it would continue with a plan to raise capital after the Trump administration ordered the offshore wind farm developer to stop construction on a near-completed project off Rhode Island, sending its shares down 17%.
The company, 50.1% owned by the Danish state, said earlier this month it would seek to shore up its finances through a $9.4 billion emergency rights issue.
“The planned rights issue had 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 U.S. offshore wind portfolio,” it said in a statement.
The Trump administration’s Bureau of Ocean Energy Management (BOEM) published its stop-work order late on Friday, forcing suspension of a project that was 80% complete with 45 out of 65 wind turbines installed.
The timing of the halt to Revolution Wind off Rhode Island was particularly damaging to Orsted, which announced earlier this month a plan to raise 60 billion Danish crowns ($9.42 billion) through a rights issue.
Orsted’s shares, already down 30% since announcing its plan on August 11, fell as much as 17% in early trading on Monday.
“This is a huge hurdle with regards to raising capital,” Sydbank analyst Jacob Pedersen told Reuters, adding he was “stunned.”
AlphaValue analyst Pierre-Alexandre Ramondenc said the U.S. move could jeopardise the success of the rights issue.
“The news came as a major shock and amounts to nothing less than political hostage-taking by the U.S. administration, given the project’s advanced stage,” Ramondenc said. On his first day in office in January, President Donald Trump suspended new offshore wind leasing pending environmental and economic review of projects. He has repeatedly criticised wind energy as ugly, unreliable and expensive.
(Reporting by Stine Jacobsen; Editing by Terje Solsvik, Lincoln Feast, Bernadette Baum and Louise Heavens)