Goldman trio put $2bn into Dong

Denmark’s Dong Energy is on course to get a total of DKr11bn ($2bn) of investment from Goldman Sachs and two pension funds, and will seek a stock exchange listing.

The agreement to invest in Dong – the world’s biggest offshore wind operator – was first flagged-up last week and confirmed by the company and the Danish government today.

Goldman Sachs accounts for DKr8bn of the investment, which will be made via subscription to new shares.

Following finalisation of the deal the Wall Street giant will own about 19% of the company and be represented on the board of Dong, along with pension fund ATP, which is putting in DKr2.2bn for about 5%.

The third investor PFA will own about 2%.

The Danish state will still be left owning the majority of Dong, but will see its stake shrink from about 81% to 60%.

The owners will seek an initial public offering (IPO) for Dong “when the conditions are right”.

If the company has not achieved an IPO by the time of its 2017 financial statement, the new investors can sell their stakes back to the Danish state.

When Dong Energy published its new strategy in February, the company said it had initiated an action plan that included the divestment of non-core assets to the tune of DKr10bn, cost cuts and an injection of additional equity of at least DKr6bn. 

Dong CEO Henrik Poulsen said today: “Dong Energy has an exciting and profitable growth potential. With the injection of new equity, we have almost fully delivered on our financial action plan and have thus secured the necessary platform for pursuing our ambitions for the coming years. 

“I regard the interest displayed by these three well renowned private investors as a vote of confidence in the company’s potential, our strong market positions and our highly competent employees."

Goldman Sachs acted as an adviser to Dong’s Danish compatriot Vestas in its new joint venture with Japan’s Mitsubishi, which was unveiled last week.

The Wall Street giant has announced a string of renewables-related investements this year, ranging from Indian wind to US and Japanese solar.

Today’s agreement sets out the main terms of the deal and the partners will now work towards finalising it, said a statement.

Completion is subject to conditions including regulatory and shareholder approval.