Orsted's Offshore Wind Project Faces Political Turbulence

Orsted plans to raise capital despite an abrupt halt to its offshore wind project by the U.S. government. The Trump administration ordered a stop to construction near Rhode Island, causing Orsted's shares to plummet. The company aims to bolster financial stability through a $9.4 billion rights issue.

On Monday, Orsted announced its intention to continue a capital-raising initiative even after the Trump administration halted its near-completed offshore wind project in Rhode Island. This decision sent Orsted's shares tumbling by 17%.

The Danish state-owned company, with a 50.1% stake, had earlier outlined plans for a $9.4 billion emergency rights issue to reinforce its financial standing. "The planned rights issue had been sized to provide the required strengthening of Orsted's capital structure to execute its business plan, even when taking into account the impact of this uncertainty on Orsted's U.S. offshore wind portfolio," the company stated.

The Bureau of Ocean Energy Management's (BOEM) late Friday directive ordered a project suspension with 80% completion, significantly affecting Orsted's efforts. Market analysts cautioned that this political intervention could pose a significant threat to the rights issue's success as Orsted's shares continue to decline.

(With inputs from agencies.)