What are the terms and valuation of the rights issue, and how will Equinor's participation affect its capital structure?

Terms & valuation:

Ørsted’s board has announced a rights‑issue for existing shareholders, but the filing (the “Rights Issue”) did not disclose the exact subscription ratio, issue price or total proceeds in the public summary. In a typical Danish‑style rights issue, the new shares are priced at a modest discount to the recent traded level (often 5‑10 % below the last‑closing price) and are offered on a 1‑to‑5 or 1‑to‑6 basis. Assuming Ørsted follows that template, the capital‑raising would be in the low‑hundred‑million‑dollar range, a figure that can be cross‑checked once the formal prospectus is released.

Equinor’s participation & capital‑structure impact:

Equinor has signaled it will exercise its pre‑emptive rights, meaning the company will purchase Ørsted’s new equity at the discounted issue price. For Equinor, this represents a modest, non‑dilutive investment that expands its exposure to Ørød’s renewable portfolio without adding net debt. The transaction will be recorded as an increase in “investment in associate” (or “strategic joint‑venture”) on Equinor’s balance sheet, while the cash outflow will be marginal relative to its USD 30 bn cash position. Consequently, Equinor’s leverage ratio will move insignificantly, but its asset base will gain a higher proportion of renewable‑heavy, low‑carbon holdings—an upgrade from a pure‑hydrocarbons profile toward a greener mix.

Trading implications:

* Ørsted (ØSTED B) – the rights issue should create short‑term buying pressure as existing shareholders scramble to secure the discounted shares. Expect a modest rally in the next 5‑10 working days, especially if the issue price is set ~8 % below Ørsted’s recent close. Technical gauges (e.g., a bounce off the 20‑day SMA and a tightening of VWAP) can be used for entry.

* Equinor (EQNR) – the participation is a capital‑preservation move; as the equity stake is modest, there is little immediate upside on EQNR’s own price. However, the greener asset allocation may be positively received by ESG‑focused investors, offering a subtle upside in the medium term. Position‑sizing traders may consider a light, long‑biased stance on EQNR if they anticipate a “green‑premium” effect over the next 3‑6 months.

Actionable take‑away:

1. Enter Ørsted’s rights‑issue once the subscription terms are confirmed—bid at the issue price to capture the discount; if you cannot subscribe, consider buying on the open market to profit from the expected short‑run price lift.

2. Maintain a neutral to mildly bullish stance on Equinor; the rights‑issue participation is capital‑light and should not materially shift its leverage, but the strategic tilt toward renewables could fuel a modest, ESG‑driven upside. A small long position or a “buy‑the‑dip” if EQNR retests recent support levels would be prudent.