Picture taken on September 4, 2023 shows windmills at the Nysted Offshore Wind Farm constructed by Danish windpower giant Orsted in 2002-2003 in the Baltic Sea near Gedser in Denmark.
Thomas Traasdahl | Afp | Getty Images
Norwegian oil giant Equinor on Monday pledged to support Denmark’s Orsted with almost $1 billion of fresh capital, backing the beleaguered company amid sustained attacks on offshore wind projects from the Trump administration.
In an apparent show of confidence in the world’s largest offshore wind developer, Equinor signaled its intention to participate in Orsted’s planned 60 billion Danish krone ($9.4 billion) rights issue and said it intended to hold on to its 10% ownership in the company.
Equinor said its strategic support of the rights issue reflects its confidence in Orsted’s underlying business and the competitiveness of offshore wind in the future energy mix. The state-backed Norwegian energy group is the second largest shareholder in Orsted, behind the Danish government.
As part of the move, Equinor said it would nominate a candidate to Orsted’s board of directors.
Shares of Orsted rose 3.6% on the news, before paring gains. The stock price, which is down nearly 90% from a 2021, peak notched a fresh record low last month after the Trump administration ordered the company to halt work on a near complete windfarm.
Equinor shares were last seen 0.2% higher on Monday morning.
Both companies have been navigating challenges around the offshore wind industry, with Equinor saying it is closely monitoring developments in the U.S., and that it intends to remain in dialogue with Orsted.
The wind industry has been a target for U.S. President Donald Trump since his first day in office. The latest blow came on Friday when the U.S. Department of Transportation canceled $679 million in federal funding for a dozen infrastructure projects that would support offshore wind power nationwide.
“Wasteful, wind projects are using resources that could otherwise go towards revitalizing America’s maritime industry,” Transportation Secretary Sean Duffy said in a statement.
Analysts at RBC Capital Markets said Equinor’s move to support Orsted could be seen as a first step for the company considering the possibility of a potential merger between the two offshore wind portfolios.
“The challenge with participating fully is that the company will effectively increase its net exposure to two 100%-owned US offshore wind projects, neither of which look likely to be farmed down in the near term, and where political support remains uncertain,” analysts at RBC Capital Markets said in a research note.
“The incremental positive is that alongside its maintained shareholding, Equinor will now be having board representation, making the most of a challenging situation,” they added.
Spokespeople for Equinor and Orsted did not immediately respond to a CNBC request for comment.
— CNBC’s Spencer Kimball & Ganesh Rao contributed to this report.
