After having a major project slammed with a stop-work order, its credit rating downgraded, and seeing a drop in stock prices, Danish wind developer rsted has raised 60 billion kroner (US$9.3 billion) so it can keep on keeping on.
"We now have a robust financial foundation, but it will be the long haul for us to deliver on our plan," Chief Executive Officer Rasmus Errboe said in an interview Tuesday, reports Bloomberg.
rsted has hit rocky waters in recent years. The multinational energy company, headquartered in Denmark, had rapidly transitioned from being a state-owned fossil utility to becoming a major global developer of offshore wind energy by the early 2020s.
But rsted was not immune to setbacks across the industry, including supply chain disruptions and rising interest rates. The company shut down two projects off the coast of New Jersey in 2023 as a result.
Other pitfalls followed in recent months. The incoming Trump administration was threatening the entire wind sector even before it won the election last November, and began its attacks on day one. Several U.S. wind projects have been targeted and stopped operations in the time since.
On August 11, rsted announced a rights issue-whereby a company invites existing shareholders to purchase more shares-to raise US$9.4 billion in funding for its Sunrise Wind project in New York, after a partial sale of the project fell through. This posed an acute problem for the company, which relies on a "farm down" business model in which parts of ongoing projects are sold off to fund further development or operations.
The faltering strategy prompted S&P Global Ratings to cut the Danish wind giant's credit rating to BBB- following the announcement-the lowest threshold still considered worthy of investment-though Moody's Ratings listed rsted as Baa2 with a stable outlook, while Fitch Ratings' BBB is listed with a negative outlook. rsted's stock prices subsequently fell by 30%.
Around the same time that credit ratings dropped, the Trump administration hit the company with a stop-work order for its nearly completed Revolution Wind farm off the coast of Rhode Island. rsted sued and won a temporary injunction to continue its work-and saw a 7% stock price increase afterwards, reports CNBC.
But rsted came up with the money in the end. Bloomberg reports that the capital raise was the biggest for a European energy company in over a decade. rsted reported that demand for shares was "extraordinarily high," as investors took up 99.3% of the more than 900 million shares offered in the fully underwritten capital increase. Stock prices have since risen about 27% above the low point following the stop-work order.
But the blows from the Trump administration are still having an impact on rsted. The company has said it will cut a quarter of its work force-or about 2,000 jobs-in the next two years because of the U.S.'s anti-wind policies. The setbacks in North America are also pushing the company to shift its business to the EU, writes Reuters.
"In many ways," said Errboe, "you see the fundamentals in Europe moving in the right direction when it comes to offshore wind."
Source: The Energy Mix
