DONG Energy IPO May Value Company at $16 Billion

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The planned stock market listing of Denmark's largest power utility, DONG Energy A/S (Fredericia, Denmark), could value the company at $16 billion.

The company's shareholders, which include the Danish government and investment firm Goldman Sachs (NYSE:GS) (New York), are looking to sell up to 17.4% of their shares at a price of 200-255 Danish kroner (DKK) ($30-$38) per share. The proposed June 9 listing would value the company between 83.5 billion kroner and 106.5 billion kroner ($12.55 billion-$16 billion), making it one of Europe's largest stock market listings.

DONG is the world's largest developer of offshore windfarms. The company has tried and failed to list itself on the stock market three times in the past, blaming a combination of financial, regulatory and political issues. The Danish government controls 59% of the company and after the initial public offering (IPO) will retain a controlling 50.1% stake. Goldman Sachs controls 18% through a subsidiary company.

"DONG Energy is one of the fastest growing energy companies in Europe, and a world leader in offshore wind," said Henrik Poulsen, chief executive officer of DONG, announcing the proposed IPO. "We have constructed 22 offshore windfarms, and hold a market share of 26% of the globally installed offshore wind capacity. Our continued profitable growth towards 2020, which will more than double our installed capacity, is supported by a robust and highly visible offshore wind build out plan. At the same time, we have come a long way in optimising and shaping our Danish utility and oil and gas divisions to be able to contribute with strong cash flows going forward. All DONG Energy employees deserve tremendous credit for getting the company ready for this IPO."

Claus Hjort Fredriksen, Denmark's finance minister, commented: "The IPO is an important milestone in the development of DONG Energy. The company has grown from primarily being a Danish utility business to becoming a growing international company with a leading position in the offshore wind sector."

Earlier this year, DONG confirmed that it was going ahead with the $6 billion Hornsea Project One offshore wind project, off the coast of Yorkshire, England, in the North Sea. It is made up of the 600-megawatt (MW) Hornsea Heron and 600-MW Hornsea Njord projects. On completion in 2020, it will be largest offshore windfarm in the world, surpassing the 630-MW London Array windfarm located in Thames Estuary in England. For additional information, see February 8, 2016, article--DONG Commits to $6 Billion Hornsea Offshore Wind Project in U.K..

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