Danske Bank: Ørsted (MW): Farm down 50% of the Borssele 1&2 offshore windfarm

Ørsted (MW) has announced an agreement to divest 50% of the 1.5GW Dutch offshore windfarm, Borssele 1&2 to Norges Bank IM (NBIM). NBIM will pay DKK10.2bn for the 752MW stake. Ørsted states that this will lead to an EBITDA gain of DKK5bn in 2021. We think it is credit positive that Ørsted is securing cash flows up front on these investments as they will improve Ørsted’s credit metrics. We also think that the implied valuation on Borssele 1&2 seems attractive compared to market expectations. This cash inflow, coupled with the divestment of the Hornsea I transmission assets (DKK10.1bn) and the recent hybrid refinancing, should make additional funding needs in 2021 less likely. We note, though, that the group has some EUR280m senior debt maturing in December this year, but Ørsted will not need to refinance this given its current cash position post Q4 of DKK32bn (which does not include the Hornsea 1 transmission proceeds). Overall, we see this as marginally positive.