Orsted cash plan is at risk after Trump blocks US Wind Project

Analysts said that Orsted's plans to raise capital are at risk after a U.S. court order to stop construction on a nearly completed project. The Danish group's stock price may also be under pressure Monday due to the U.S. ruling.

Orsted announced on Monday that it would continue with its planned rights issue, despite an order from the United States. The company is owned by the Danish government which holds 50.1%.

The statement said that the planned rights issue was sized to strengthen Orsted's capital to execute its business plans, even after taking into consideration the impact of the uncertainty on Orsted’s U.S. Offshore Wind Portfolio.

The Bureau of Ocean Energy Management of the Trump administration published its stop-work orders late Friday night, forcing a suspension of a project which was 80% completed with 45 of 65 windmills installed.

Orsted was hit hard by the timing of the stoppage of Revolution Wind in Rhode Island. Orsted had announced earlier in this month that it planned to raise 60 billion Danish crowns (9.42 billion dollars) via a rights issue.

Jacob Pedersen, a Sydbank analyst, said he was "stunned" by the situation.

AlphaValue's Pierre-Alexandre Ramondenc, an analyst at the company, said that the U.S. decision could undermine the success of the right issue.

Ramondenc stated that the news was a shock, and amounted to little more than a political hostage taking by the U.S. government given the advanced stage of the project.

Donald Trump, on his first day as president in January, suspended all new offshore wind leasing projects pending an environmental and economic assessment of the projects. He has criticised wind power as being ugly, unreliable, and expensive.

Analysts said that Orsted's stock price, which has fallen 30% since August 11 when it announced its plan, now faces a further risk of a decline.

(source: Reuters)