Goldman Sachs, ATP and PFA to buy 26% stake in DONG Energy

2 October 2013 (Last Updated October 2nd, 2013 18:30)

Goldman Sachs and the Danish pension funds Arbejdsmarkedets Tillaegspension (ATP) and PFA Pension Forsikringsaktieselskab have reached an agreement with DONG Energy and the Danish Ministry of Finance to invest DKK11bn ($2bn) to buy a 26% stake in DONG Energy.

Goldman Sachs and the Danish pension funds Arbejdsmarkedets Tillaegspension (ATP) and PFA Pension Forsikringsaktieselskab have reached an agreement with DONG Energy and the Danish Ministry of Finance to invest DKK11bn ($2bn) to buy a 26% stake in DONG Energy.

As per the agreed terms, Goldman Sachs' Merchant Banking Division will subscribe shares worth DKK8bn ($1.46bn), which is a 19% stake in the project, while ATP and PFA will invest DKK2.2bn ($401m) and DKK800m ($146m) to buy stakes of around 5% and 2%, respectively.

The parties are likely to conclude the final agreement before the end of 2013 and the transaction reduces the government's stake to around 60% from 81%.

All the parties have agreed to seek an initial public offering (IPO) when conditions are right. The new investors will have an option to sell their stake back to the Danish state, should it fail to complete IPO before the release of the company's 2017 financial report.

"The new investors will have an option to sell their stake back to the Danish state."

The sale of stake is part of the company's financial restructuring plan announced in February 2013 that called for reducing costs by 20% and selling assets to raise funds to increase investments in oil and gas exploration and wind power projects.

With this transaction, which was based on a valuation of DKK31.5bn ($5.7bn) before the capital increase, the company with 2GW offshore wind portfolio will be able to strengthen its balance sheet and further pursue new projects to achieve its ambitious 6.5GW offshore wind target by 2020.

DONG Energy CEO Henrik Poulsen said that the new capital increase will help the company to pursue its ambitions in the future.

"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," added Poulsen.

Energy