A hostile US policy has blown a $9 billion hole in the financials of Danish wind leader Ørsted, forcing the company to turn to shareholders for an emergency infusion of cash. The news caused a market panic, with the company’s stock crashing to a historic low.
The financial hole was created when the Trump administration’s review of wind permits made it impossible for Ørsted to execute its standard business plan. The company had intended to sell a stake in its new US east coast project to cover costs, but the asset’s value has been crushed by the political climate.
This policy blow comes at a vulnerable moment, with the industry still facing the economic aftershocks of the pandemic, including high costs and interest rates. The administration’s move to halt a competitor’s project has only deepened the financial uncertainty for all players.
With the backing of the Danish state, the $9 billion rights issue is designed to plug the hole and provide “financial robustness.” Ørsted’s leadership has called the situation “extraordinary” as it fights to salvage its US plans and global growth strategy.
A $9 Billion Hole: US Policy Blows Up Ørsted’s Financials
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