Someone seems to be missing their ⌀. I put it in the headline but am too lazy to replace it in the text.
From ZeroHedge, August 11:
Shares of Danish company Orsted A/S crashed the most on record after the wind developer announced a rights offering of up to 60 billion kroner ($9.4 billion). The offering aims to stabilize its finances, which have been hit hard by soaring costs, supply chain disruptions, and President Trump's rollback of "green" energy projects.
Orsted shares plunged 29%, falling below their 2016 IPO price after the company announced the largest share offering in the European energy sector since Enel SpA in 2009. The capital raise is an attempt by the CEO to shore up finances as the entire green energy sector comes under severe pressure in the era of Trump and common-sense energy policies.
With wind farm construction as its core business, Orsted has been exposed to more canceled projects than any of its industry peers, including ones in the US and the UK. The funding gap swelled after scrapping a stake sale in the Sunrise Wind project off New York.
Orsted also announced the sale of its European onshore wind unit, targeting 35 billion kroner from divestments by next year, and plans to invest 145 billion kroner from 2025-27 while maintaining an investment-grade rating and resuming dividends in 2026. Full-year EBITDA guidance remains at 25 to 28 billion kroner, though offshore wind targets were cut due to weaker wind speeds.
"Orsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years' macroeconomic and supply chain challenges," CEO Rasmus Errboe said in a statement.
Commenting on the rights offer, Goldman analysts led by Alberto Gandolfi told clients that Orsted's offering was "largely unexpected, with clarity expected by mid-September… but also a clean-up move."
Gandolfi explained more:
Orsted has just announced the intention to carry out a DKK 60 bn rights issue (c.€8 bn), equivalent to around 45% of its market capitalisation. Although not totally unexpected to us – in our recent report (here), we flagged execution risks on disposals and FCF headwinds from rolling incentives – we believe this would come as a surprise to most of the Sell Side. Given the size, the rights issue would be highly dilutive, and hence we believe could lead to a swift drop in the share price. We also note that we have not seen the terms of the rights issue, and the terms (based on the H1 investor presentation available on Orsted website) would be disclosed in the first half of September, thus implying 3-4 weeks of market uncertainty. On the other hand, we highlight that once completed, this would most likely represent a "clean up move" as we would expect the resulting B/S (post rights issue) to be solid. As a reference, consensus YE Net Debt currently stands at DKK 75 bn on Bloomberg, and we project 2025 EBITDA at DKK c.28 bn. A restored B/S strength would put less pressure on Orsted to divest assets (current plan implies DKK 40 bn pending disposals). Lastly, we also flag that, pre raise, Bloomberg consensus P/E for 2026 is a mere 12x; the stock would therefore not be on an overly high P/E even post rights. We remain Neutral rated.
The analysts maintained a "Neutral" rating on the stock with a 300-kroner 12-month price target....
....MUCH MORE, more analysts weigh in.
Earlier this morning we saw a headline quoting Nordnet's Per Hansen describe the situation as:
“It's an utter disaster”
And the thing is, this didn't sneak up on the market, it has been apparent for at least three years.
November 2023 - "Wind industry deals with blowback from Ørsted scrapping 2 wind power projects in New Jersey"
Previously:
"Offshore Wind Developers Likely to Cancel Some Contracts After NY Decision"
Ørsted CEO Says U.S. Offshore Wind Targets Not Out of Reach
"The first US offshore wind auction in the Gulf of Mexico was a dud"Although we didn't focus on it in August 30's "Ørsted, "World's Largest Offshore Wind Farm-Maker Crashes Most On Record After Catastrophic Results"", during that same conference call Ørsted said it considered abandoning their big offshore New Jersey wind farm but will stick with it, for now.
They seemed to be doing better back when they were
November 2023 - "How the U.S. Market Went Sideways for a Wind-Power Giant"
August 2024 - "Ørsted Takes $500 Million Hit Led by Connecticut Wind Delay"