Wind farm developer Orsted's plan to raise much-needed capital is at risk following a U.S. order to halt construction of a near-complete project, and the Danish group's share price could come under pressure on Monday, analysts said.
The Trump administration's Bureau of Ocean Energy Management (BOEM) published its stop-work order late on Friday, forcing the suspension of a project that was 80% complete with all offshore foundations in place and 45 out of 65 wind turbines installed.
The timing of the halt to Revolution Wind off Rhode Island is particularly damaging for Orsted, which announced earlier this month a plan to raise 60 billion Danish crowns ($9.42 billion) through a rights issue.
"This is a huge hurdle with regards to raising capital," Sydbank analyst Jacob Pedersen told Reuters. "I've experienced a lot in my more than 20 years as a stock analyst, but this tops it all, I'm stunned," he added.
AlphaValue analyst Pierre-Alexandre Ramondenc said the U.S. move could jeopardise the success of the rights issue, which he described as "already highly dilutive."
"The news came as a major shock and amounts to nothing less than political hostage-taking by the U.S. administration, given the project's advanced stage," Ramondenc said.
On his first day in office in January, President Donald Trump suspended new offshore wind leasing pending environmental and economic review of projects. He has repeatedly criticised wind energy as ugly, unreliable and expensive.
Orsted's share price, already down 30% since announcing its plan on 11 August, now faces further downside risk, the analysts said.
Orsted has said it will update investors on the impact of the BOEM order but has not said when and has declined to comment further.
The company is 50.1% owned by the Danish state, and Denmark's Finance Minister Nicolai Wammen said he was "naturally following the case closely".
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Start your day informed with AnewZ Morning Brief. Here are the top news stories for the 15 March, covering the latest developments you need to know.
Top U.S. and Chinese economic officials launched a new round of talks in Paris on Sunday (15 March) to resolve issues in their trade truce. The discussions aim to smooth the way for U.S. President Donald Trump’s visit to Beijing to meet Chinese President Xi Jinping at the end of March.
The process of evacuating foreign diplomats and citizens from Iran to Azerbaijan through the Astara state border crossing continues on Sunday (15 March), ensuring smooth and efficient transit for those arriving.
The death toll from heavy rains and flooding in Brazil’s Minas Gerais state has risen to 46, authorities said, with 21 people still reported missing. The storms triggered landslides and widespread flooding, displacing thousands across Juiz de Fora and Uba.
The administration of U.S. President Donald Trump on Thursday (12 February) announced the repeal of a scientific finding that greenhouse gas emissions endanger human health, and eliminated federal tailpipe emissions standards for cars and trucks.
Tropical Cyclone Gezani has killed at least 31 people and left four others missing after tearing through eastern Madagascar, the government said on Wednesday, with the island nation’s second-largest city bearing the brunt of the destruction.
Rivers and reservoirs across Spain and Portugal were on the verge of overflowing on Wednesday as a new weather front pounded the Iberian peninsula, compounding damage from last week's Storm Kristin.
Morocco has evacuated more than 100,000 people from four provinces after heavy rainfall triggered flash floods across several northern regions, the Interior Ministry said on Wednesday.
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