Ørsted Cancels Partial Divestment of Sunrise Wind Offshore Wind Farm

Danish offshore wind developer Ørsted has announced the discontinuation of the process for the partial divestment of the 924MW Sunrise Wind offshore wind farm, which was set to provide power to New York. The company cited adverse developments in the US offshore wind market as the reason for this decision.

Due to the challenges in completing the planned partial divestment and associated non-recourse project financing of the Sunrise Wind project on favorable terms, Ørsted has opted for a different approach. The company now plans to conduct a rights issue with pre-emptive rights for existing shareholders, aiming to raise DKK 60bn ($9.36bn) in gross proceeds.

The Danish state has committed to subscribing for its 50.1% pro rata share of the rights issue. Any remaining shares not taken up by existing shareholders or other eligible investors will be underwritten by Morgan Stanley & Co.

The funds raised from the rights issue will be utilized to strengthen Ørsted’s capital structure and provide financial flexibility to support the company’s investment program and business plan. This includes a significant investment of approximately DKK 145bn ($22.6bn) in the period 2025-2027 for the construction of Ørsted’s offshore wind projects.

In addition, the proceeds will cover the funding requirements for the full ownership of the Sunrise Wind project, which is estimated to cost around DKK 40bn ($6.24bn) to construct.

While Ørsted has faced challenges in the US offshore wind market, the company remains optimistic about the long-term prospects for offshore wind in its core European markets. Ørsted is actively pursuing the farm-down processes for its Changhua 2 and Hornsea 3 offshore wind farms and has initiated a sales process for a potential full divestment of its European onshore business, with expected proceeds of more than DKK 35bn ($5.46bn) during 2025-2026.

Commenting on the decision, Rasmus Errboe, president and CEO of Ørsted, stated, “Long-term, the fundamentals for offshore wind remain strong in our core markets in Europe. However, Ørsted and our industry are in an extraordinary situation with the adverse market development in the US on top of the past years’ macroeconomic and supply chain challenges.”