By Christian Moess Laursen
Denmark's Orsted said it would sell minority stakes in four U.K. offshore-wind farms to Canadian asset manager Brookfield in a deal valued at 1.745 billion pounds ($2.27 billion), as the struggling wind-energy giant aims to boost its financial position by selling off assets.
The renewable-energy company said Wednesday that Brookfield, institutional partners, and its listed affiliate Brookfield Renewable would acquire 12.45% stakes in the Hornsea 1 and 2 wind farms in the North Sea and the Walney Extension and Burbo Bank Extension wind farms in the Irish Sea.
The four sites have a combined capacity of around 3.5 gigawatts. The deal, which is expected to close by the end of the year, is part of Orsted's farm-down program that it outlined in February.
Last year, the Danish company hit major headwinds as it pushed aggressively to expand into new markets, especially the U.S. Through cost cutting, divestments and halted shareholder payouts, the company is working to right itself and bolster its balance sheet.
From 2024 to 2026, it targets 70 billion to 80 billion Danish kroner ($10.15 billion-$11.60 billion) of disposal proceeds. Its ability to deliver these are seen as a key debate for its stock, according to analysts.
The transaction will likely be well-received by the market in the short term, but questions remain about the long-term sustainability of selling valuable assets and their cash flows to fill balance sheet gaps, Citi analyst Jenny Ping said in a note.
Orsted shares were down around 1.5% in morning trading in Europe, paring the year-to-date gain to around 10%.
"Today's transaction is an important milestone in the farm-down program as part of our business plan, supporting our significant re-investment in new assets," Chief Executive Mads Nipper said.
Orsted will retain a 37.55 % ownership interest in the four assets.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
October 30, 2024 05:44 ET (09:44 GMT)
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