Burbo Bank, Liverpool Bay, England, viewed from the sea turbines on Burbo wind farm off the U.K. coast.
Ucg | Universal Images Group | Getty Images
Orsted shares crashed more than 25% on Monday morning, after the wind farm developer said it plans a 60 billion Danish kroner ($9.4 billion) rights issue, following a “material adverse development” in the U.S. market.
The company said this turn of events left it unable to raise funds from a planned partial divestment of its Sunrise Wind project off the coast of New York.
Given the market conditions, Orsted’s board of directors decided to end the process of selling a stake in Sunrise Wind, which would have provided the “required strengthening” of its capital structure to support its investment and business development programs.
Orsted — the world’s largest offshore wind developer — will be offering existing shareholders first refusal on the new shares under the planned move, which is being backed by the Danish State, the company’s largest shareholder.
Shares were 26.8% lower by 9:09 a.m. in London (4:09 a.m. ET).
‘Adverse’ U.S. market
U.S. President Donald Trump has clamped down on the wind power industry since his return to the White House earlier this year. On his first day in office, Trump signed an executive order suspending new or renewed onshore and offshore wind leases.
The U.S. president, who is championing America’s oil and gas industries, told reporters in January that his administration was “not going to do the wind thing.”
“Big ugly windmills, they ruin your neighborhood,” he said at the time.
Orsted noted on Monday that its business plan relies, in part, upon its divestment program. Losing the proceeds from the Sunrise Wind divestment and the associated project financing, the company said, had led to an incremental funding requirement of around 40 billion Danish kroner.
This breaking news story is being updated.
— CNBC’s Sam Meredith contributed to this article
