Orsted runs in Copenhagen, Equinor backs capital increase and focuses on revival

(Il Sole 24 Ore Radiocor) - A good start to the week for Orsted, after Norwegian shareholder Equinor expressed support for the maxi capital increase and ventilated a strengthening of ties between the two companies, thus reviving speculation of a merger between the two groups. The share price of the world's number one in offshore wind farms has recovered around 11% in the past five sessions, after a series of slips caused by the difficulties in the US that led to the decision to increase capital by 60 billion kroner (around EUR 8 billion). Since the beginning of the year, the share price has fallen by almost 39%.

Equinor has announced that it will support the reprivatisation of Orsted by underwriting its 10% share, or SEK 6 billion. The decision, explained the 67% state-owned Norwegian energy group, reflects the desire to strengthen ties with Orsted, at a time when both companies have to overcome great obstacles in the US. "In the face of the challenges facing offshore wind, the industry will go through a phase of consolidation and the emergence of new business models," Equinor said in a note, adding that it believes "closer industrial and strategic collaboration between Orsted and Equinor can create value for all shareholders of both companies." Equinor reiterated its confidence in Orsted's business and the competitiveness of offshore wind and plans to propose a candidate for Orsted's board of directors before the next annual general meeting. The Norwegian company also stated that it is closely monitoring the situation in the US and will continue to engage in dialogue with Orsted as events develop.

Orsted will ask its shareholders, meeting in an extraordinary general meeting next Friday, to approve a capital increase that aims to strengthen the company's financial position in the face of 'significant negative developments' in the US. In fact, the Trump administration's decisions have derailed the Danish company's strategy. In addition to the cuts to renewables subsidies contained in the US budget bill, the Bureau of Ocean Energy Management (Boem) in August issued a work suspension order for Orsted's $1.5bn Revolution Wind project, which is 80% complete, marking the second major suspension of an offshore wind project this year. In April, the Boem had already halted Equinor's Empire Wind 1 project off the coast of New York. Despite growing obstacles overseas, Orsted, which is 50.1% controlled by the Danish state, reiterated its intention to proceed with the capital increase, and the Danish Ministry of Finance confirmed its commitment to participate.