The Danish government and other shareholders plan to sell a combined stake of at least 15% in renewables-focused utility Dong Energy A/S as part of an initial public offering (IPO) on Nasdaq Copenhagen this summer.
Dong Energy announced its decision to proceed with the IPO today, noting that the planned launch this summer is dependent on prevailing market conditions.
The company pointed out that the Kingdom of Denmark, holder of a 58.8% interest in Dong, will seek to retain a stake of 50.1% following the listing. Its other major stockholders include Goldman Sachs's New Energy Investment Sarl with a 17.9% interest, SEAS-NVE Holding A/S with 10.8% and ATP with 4.9%.
No new share capital will be issued as part of the listing.
The final offer size will be disclosed in the IPO prospectus. JP Morgan Securities Plc, Morgan Stanley & Co International Plc and Nordea Markets will serve as joint global coordinators and joint bookrunners.
Presently more than half of Dong Energy’s electricity and heat is produced from renewable sources and the company holds a 26% share of the global installed offshore wind capacity. It says that this is more than twice the share of the second-largest player.
“We have a robust and highly visible build-out plan for offshore wind, which will deliver strong and profitable growth in the coming years,” said CEO Henrik Poulsen. Between 2017 and 2020, it estimates that its total gross investment programme would range from DKK 60 billion (USD 9.2bn/EUR 8.1bn) to DKK 70 billion. The company expects wind power to attract 80% of the expected gross investments in 2016-2020.
For the period 2017-2020, average Return on Capital Employed (ROCE) is seen at about 12%-14%, driven by the growth in wind.
Dong Energy is converting the majority of its thermal power and heat plants to sustainable biomass. It also owns a portfolio of low-cost oil and gas producing assets in Denmark, Norway and the UK that generate cash for reinvestment in renewables. The company also runs the power grid in and around Copenhagen.
The utility noted it will distribute a dividend of DKK 2.5 billion for 2016 should the IPO takes place as scheduled. For subsequent years towards 2020, the company will aim to raise the annual dividend by a high single digit rate compared to the dividend for the previous year, it added.
(DKK 1.0 = USD 0.153/EUR 0.134)
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Source: DONG Energy A/S
