Dong's 1.47 billion investment gets legal agreement

DENMARK: Dong Energy has signed a legally binding agreement detailing the terms and conditions of the DKK 11 billion (EUR 1.47 billion) investment from Goldman Sachs and two Danish pension funds.

Denmark’s finance ministry, Danish pension funds ATP and PFA, and developer Dong signed the agreement for DKK 11 billion of shares. The deal was originally announced on 2 October.

Goldman Sachs will subscribe to DKK 8 billion, ATP to DKK 2.2 billion and PFA to DKK 800 million of shares. The new shares will be based on a DKK 31.5 billion valuation of Dong, made prior to this investment.

Dong said the money will be invested in the areas outlined in its 2020 strategy to build 6.5GW of operating offshore wind capacity in north-west Europe.

The Danish utility and offshore developer has an intermediate target of 3.5GW by the end of 2016. This compares with an operational portfolio of 1.7GW at the end of 2012.

Fritz Schur, Dong Energy’s chairman of the board, said: "The new equity entails that we can carry out our growth strategy, including our significant investment programme within offshore wind."

The deal will need to be approved by the Danish parliament’s finance committee and relevant competition and energy authorities.

The Danish state’s ownership in Dong is being reduced from around 81% to 60%. Minority shareholders’ ownership will be reduced from 19% to 14%. Goldman Sachs funds, ATP and PFA will own approximately 19%, 5% and 2%, respectively.

Dong Energy’s employees will be offered the opportunity to subscribe for shares.

The transaction will be completed at an extraordinary general meeting, which is due to take place in February 2014.