Posted on August 11, 2025
Orsted A/S shares plunged a record 29% after the Danish offshore wind giant announced plans to raise as much as 60 billion Danish kroner ($9.4 billion) in a stock sale — another setback for a company once considered a flagship of the green energy transition.
The share offering would be the biggest in the European energy sector since Enel SpA in 2009 and has sent shares below the price of its initial public offering in 2016. It confirms a Bloomberg News report from Friday.
The capital raise is an attempt by Chief Executive Officer Rasmus Errboe to steady Orsted’s finances after US President Donald Trump’s policies to limit offshore wind stifled the company’s ability to sell stakes in projects it’s already building. In the first days of his presidency, Trump halted permitting for new projects and his flagship tax and spending bill rolled back tax credits that were a boon for the industry.
The company, which pioneered offshore wind, has now canceled more projects than any of its competitors including a huge site in the UK and two major wind farms in the US. For now, it looks like the only option is to sell shares. Orsted is more exposed than other offshore developers because building wind farms is its core business. SSE Plc and Iberdrola SA have ramped up grid spending to diversify their exposure but Orsted doesn’t have another lever to pull.
Orsted has been emblematic of the promise and troubles of the wind power industry. The outlook for the sector soared along with the company’s share price late last decade when investors flocked to what was seen as one of the best bets to cash in on the transition away from fossil fuels. And as projects scaled up, costs fell, promising to help fuel growth for years to come.
But costs for key inputs like steel soared during the Covid-19 pandemic, along with the price of transportation and labor. And as central banks hiked interest rates to rein in inflation, the cost of building a wind farm soared to the highest levels in years and sapped demand from investors to buy into projects, stymieing a key source of funding for developers like Orsted. As costs mounted in recent years, the Danish developer canceled key projects, replaced its top executives and announced turnaround plans that sought to avoid having to issue new shares.
Rasmus Errboe
“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,” Errboe said in a statement.
The company will hold an extraordinary general meeting on Sept. 5 to approve distributing securities that give stockholders the right to buy additional shares, according to a statement Monday.
After Monday’s share price plunge, the deal is equivalent to almost two thirds of Orsted’s market value.
Selling down
Orsted typically funds new projects by selling a stake in a project that’s either complete or far along in its development. But changes in the US led Orsted to cancel the planned partial sale of its Sunrise Wind farm off the coast of New York, leaving a major funding gap.
“Given the unprecedented regulatory development in the US, we have made a comprehensive assessment of all options, and Orsted’s Board of Directors has concluded that the planned rights issue is the best path forward for the company and its stakeholders,” Orsted’s Chair, Lene Skole said in a statement.
The Danish state will maintain its 50.1% stake in the company through the process. The decline in the profitability of this stake could create friction within the coalition government.
Morgan Stanley is underwriting the rights offer and acting as an adviser to Orsted. Lazard is also an adviser to the company.
The company also announced that it launched a process to sell its European onshore wind business. Orsted expects to raise more than 35 billion Danish kroner from divestments during 2025 and 2026. It also updated its medium-term targets, including plans to invest approximately 145 billion Danish kroner from 2025 to 2027. It’s committed to maintain a solid investment-grade credit rating and aims to reinstate dividends for the financial year 2026.
It expects earnings to rise to over 28 billion Danish kroner in 2026 down from previous guidance of 29 billion to 33 billion, and then to more than 32 billion in 2027.
Orsted also confirmed its full-year earnings guidance and announced results for the second quarter, ahead of plans to do so later this week. It expects its full-year earnings before income tax, depreciation and amortization of 25 billion to 28 billion Danish kroner, excluding earnings from new partnership agreements and impacts from cancellation fees. The company lowered guidance for its offshore wind segment to neutral due to lower wind speeds during the first months of 2025.
“The need for equity doesn’t come as a complete surprise given its deteriorating balance sheet over the last few years and increasingly tough transaction market that made it harder to close its funding gap,” said Jenny Ping, analyst at Citigroup Global Markets Ltd.
Errboe took over as chief executive officer of Orsted earlier this year after a series of surprise losses by his predecessor, including the decision to cancel two major projects in the US. Earlier this year, Errboe announced a plan to cut back on growth in the near term, focusing only on the most profitable projects.
