Equinor Becomes 2nd Largest Shareholder in Orsted

Equinor ASA is now the second largest shareholder in Ørsted A/S after a major purchase of shares in the Danish wind energy firm.

Equinor acquired 41,197,344 shares in Orsted, which corresponds to 9.8 percent of the shares and votes in the company. The Danish state holds the controlling stake in Orsted.

Orsted has a net renewable generation capacity of around 10.4 gigawatts (GW), and a gross portfolio of offshore wind projects in execution of around 7 GW. The firm’s target is to achieve a gross installed renewable capacity of around 35 to 38 GW by 2030, according to the release. Net renewable generation capacity refers to the company’s equity share of offshore wind, onshore wind and solar generation capacity.

“Equinor has a long-term perspective and will be a supportive owner in Ørsted. This is a counter-cyclical investment in a leading developer, and a premium portfolio of operating offshore wind assets. The exposure to producing assets complements Equinor’s operated offshore wind portfolio of large projects under development”, Equinor CEO Anders Opedal said in a statement.

“This investment is in line with Equinor’s strategy of value-driven growth in renewables. The offshore wind industry is currently facing a set of challenges, but we remain confident in the long-term outlook for the sector, and the crucial role offshore wind will play in the energy transition,” Opedal added.

Equinor said its ownership position in Orsted had been built over time, through a combination of market purchases and a block trade. Subject to obtaining regulatory approvals under applicable Foreign Direct Investment regulations, Equinor stated that it intends to increase its ownership to 10 percent.

Further, Equinor said it is “supportive of Orsted’s strategy and management” and is not seeking board representation.

The current market value of Equinor’s stake in Orsted is around $2.5 billion. The transaction will be executed within the company’s communicated financial framework, it noted.

In August, Orsted posted a loss of $0.25 billion (DKK 1.68 billion) for the second quarter, compared to a loss of $79.3 million (DKK 538 million) in the previous-year quarter, as it announced the delay of an offshore U.S. wind project.

The Danish wind energy company’s net income for the first half was $137.22 million (DKK 931 million), compared to $0.39 billion (DKK 2.66 billion) in the same period in 2023, according to its earnings release.

Ørsted said its earnings from offshore sites amounted to $1.67 billion (DKK 11.3 billion), which was an increase of $0.34 billion (DKK 2.3 billion) compared to the same period last year. The increase was driven by the ramp-up of generation at our offshore wind farms Greater Changhua 1 and 2a, South Fork, and Gode Wind 3, higher wind speeds, higher prices on inflation-indexed CfDs, and green certificates.

Meanwhile, impairment losses had a negative effect in the first half, mainly driven by the decision to cease execution of FlagshipONE, a construction delay related to the onshore substation for Revolution Wind, an update of our fair value measurement related to our Ocean Wind seabeds, and an increase in the U.S. long-dated interest rate, according to the release.

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