DONG Energy's ownership circle expanded in 2014, helping the company re-establish a strong financial base. The IPO is intended to underpin DONG Energy's journey as a leading global company in the field of renewable energy.
All companies need capital to finance their operation and development. Of course, this also applies to DONG Energy, which invests significant amounts in new offshore wind farms and in more eco-friendly ways to generate electricity and heat at its power stations.
In 2012, however, we found ourselves facing a tough financial challenge. Our earnings dropped sharply on account of changes to the gas market. More specifically, our earnings plummeted by fully 37% between 2011 and 2012.
Over the same period, our debts increased by 29%, from DKK 34.1 billion to DKK 43.8 billion. The rise in our debts was largely attributable to investments in wind energy and in oil and gas exploration and production activities in the North Sea.
This combination of unfortunate circumstances resulted in a loss of DKK 4 billion on our bottom line.
We were therefore obliged to act to strengthen DONG Energy's financial position.
Over and above cutting costs, selling off assets and restructuring the loss-generating gas business, it was clear that DONG Energy's equity needed an injection of at least DKK 6-8 billion.
The owners therefore decided to expand the company's share capital and to open the doors to new investors. The agreement was finalised in 2014. New Energy Investment (controlled by the investment bank Goldman Sachs) and the Danish pension funds ATP and PFA Pension jointly subscribed shares valued at DKK 11 billion. The Danish Parliament's Finance Committee approved the capital injection in January 2014.
With the listing on 9June 2016 DONG Energy will also in the future have the possibility of attracting capital needed for investing in green, independent and economically sustainable energy.
The 2013 plan for re-establishing and expanding the capital base in DONG Energy (in Danish)
The 2013 agreement to inject DKK 11 billion of new capital into DONG Energy (in Danish)
The agreement regarding the DONG Energy IPO (in Danish)