Orsted faces share slump after Trump offshore wind freeze spooks investors

Shares in Ørsted, the world’s largest developer of offshore wind farms, endured a dramatic drop after the group announced a £7.4 billion capital raise. The funding move followed a wave of jitters sparked by the Trump administration’s decision to halt construction of Equinor’s Empire Wind project off the New York coast earlier this year.

The abrupt regulatory intervention by the US government in April triggered a domino effect across the offshore wind sector. Potential investors in Ørsted’s neighbouring Sunrise Wind project were unsettled, derailing Ørsted’s plans to sell a stake in the scheme and secure project financing on favourable terms. Reliant on selling project stakes to maintain its balance sheet, Ørsted now faces the requirement to fund the entirety of Sunrise Wind alone.

The Danish state, holding a 50.1 per cent share, is backing the rights issue. All other shareholders, including the Norwegian operator Equinor with its 10 per cent stake, are also being offered the opportunity to participate in this fully underwritten fundraising.

Ørsted’s shares sank by almost a third during trading, closing down 29.7 per cent at DKK217.10. The company’s share price has tumbled over 80 per cent from its 2021 peak, reflecting broader pressures on the offshore wind industry as higher costs, disrupted supply chains, and regulatory reversals roil the nascent US market. The group had already recorded substantial impairments on its American ventures.

US opposition to offshore wind has ramped up since January when Donald Trump ordered a halt to new wind leasing and permitting, fulfilling longstanding scepticism voiced during his previous term. Doug Burgum, the Secretary of the Interior, escalated matters by instructing the Bureau of Ocean Energy Management to freeze Empire Wind, claiming rushed approvals under the previous administration. Although this decision was reversed a month later, sentiment among international investors and lenders remains bruised.

Chief executive Rasmus Errboe said that offshore wind in America now faces ‘significantly increased’ perceived risks among investors and banks. The group’s inability to complete the anticipated divestment and secure project financing on sound terms has ‘fundamentally altered our capital requirements’. Sunrise Wind alone generated a funding requirement near DKK40 billion, prompting Ørsted to seek £7.4 billion through its rights issue in order to protect both its rating and business model.

With 12 wind farms already operational in UK waters and several more underway worldwide, Ørsted remains committed to the renewable energy transition. However, the recent US policy turbulence underlines the precarious balance required to simultaneously deploy vast capital, manage rising costs, and maintain investor confidence in this transforming global energy market.