Orsted Faces Market Uncertainty as US Halts Revolution Wind Project Construction

Shares of offshore wind developer Orsted plummeted by approximately 17% on Monday, hitting a record low, following a stop-work order issued by the U.S. government for its nearly completed Revolution Wind Project.

The U.S. Bureau of Ocean Ocean Energy Management (BOEM) issued the order late Friday for the project off Rhode Island, which is reportedly 80% complete with 45 out of 65 turbines installed. Orsted confirmed it would comply with the order and is exploring options to resolve the issue and resume construction.

This halt comes at a critical juncture for Orsted, which recently announced plans for a 60 billion Danish kroner ($9.4 billion) rights issue to raise capital. Despite the market reaction and analyst concerns regarding the financial implications of the stop-work order, Orsted stated it would proceed with the capital raising proposal, backed by its majority stakeholder, the Danish state.

Sydbank’s head of equity research, Jacob Pedersen, noted the potential financial consequences could range from ongoing costs due to the halt to a worst-case scenario where the project never supplies electricity, leading to significant write-downs and increased capital requirements. Orsted’s decision to continue with the rights issue suggests it anticipates a more favorable resolution.

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