In a devastating blow to the renewable energy sector, shares in Danish giant Ørsted have fallen below their 2016 flotation price, hitting an all-time low. The market rout, which erased nearly a third of the company’s value, followed its announcement of a $9 billion cash call forced by the political havoc wreaked by the Trump administration.
Ørsted’s management told investors its business model has been derailed. The company, which builds some of the world’s biggest offshore wind farms, typically funds its work by selling a stake in each project. However, President Trump’s hardline stance has devalued its US projects so severely that this is no longer a viable option.
The administration’s review of wind permitting, ordered on day one, sent shivers through an industry already grappling with inflation and supply chain woes. The subsequent halt of a major Equinor project confirmed that no developer was safe, shattering investor confidence.
With the backing of the Danish state, Ørsted hopes the $9 billion injection will stabilize its capital structure. CEO Rasmus Errboe stressed the “extraordinary situation” facing the industry, as the company attempts to salvage its US plans and secure its global pipeline.