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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