Equinor buys 9.8% stake in offshore wind developer Orsted

OSLO (Reuters) -Norway's Equinor has bought a 9.8% stake valued at around $2.5 billion in renewable energy group Orsted (CSE:ORSTED ), it said on Monday, making it the second largest shareholder after the Danish government.

Orsted's share price rose on the news, trading 3.4% higher at 1103 GMT, while Equinor's shares fell by 1.9%.

An Orsted spokesperson declined to comment.

Equinor said it had a long-term perspective on the investment but did not plan to raise its stake beyond 10%.

Orsted, the world's biggest offshore wind developer, has been hit by soaring costs and project delays as inflation raised the price of turbines and other equipment and services, sending its shares down 65% since early 2021.

Equinor, meanwhile, benefited from a surge in oil and natural gas prices and its share price nearly doubled in the same period, but the company has struggled to build up its renewables portfolio despite setting ambitious targets.

The Orsted investment was in line with Equinor's strategy of "value-driven growth in renewables", the company said.

"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," CEO Anders Opedal said in a statement.

Equinor is supportive of Orsted's strategy and management, and is not seeking board representation, the Norwegian group said.

"This is a counter-cyclical investment in a leading developer, and a premium portfolio of operating offshore wind assets," Opedal said.



"The exposure to producing assets complements Equinor's operated offshore wind portfolio of large projects under development," he added.

Equinor's ownership position was built over time, through a combination of market purchases and a block trade, the company said.

Source: Investing.com