Danish pension funds link with Goldman Sachs to invest €1.5bn in DONG Energy

Danish pension funds ATP and PFA and investment bank Goldman Sachs have reached an agreement with the Danish finance ministry to acquire DKK11bn (€1.5bn) worth of shares in DONG, the Danish energy firm that is the world’s largest offshore wind park builder and operator.

Under the terms of the deal, Goldman would account for the bulk of the investment, buying DKK8bn worth of DONG shares, followed by ATP with DKK2.2bn and PFA with DKK800m.

The investments would give the US bank a 19% stake in DONG, ATP 5% and PFA 2%. Representatives from Goldman and ATP would also sit on the energy firm’s board of directors. Meanwhile, the government’s stake in the firm would be cut to 60% from 81% currently. The deal is subject to political and regulatory approval.

“DONG Energy has an exciting and profitable growth potential. With the injection of new equity, we have almost fully delivered on our financial action plan and have secured the necessary platform for pursuing our ambitions in the coming years,” said DONG CEO Henrik Poulsen.A key goal of DONG’s financial plan, unveiled last February, was to raise at least DKK6-8bn in new capital from investors. State-owned DONG is also planning an initial public offering (IPO) by 2018 at the latest. If the IPO does not happen by then, Goldman, ATP and PFA have been given the right to sell their shares back to the government under agreed terms.

Henrik Heideby, CEO of the DKK370bn PFA scheme, said the investment in DONG was a “great opportunity to generate attractive long term returns.” Carsten Stendevad, CEO of the DKK714bn labour market scheme ATP, said that since DONG had significant upside potential, this was a great deal for ATP’s members.

DONG was one of the developers of London Array, the 630MW UK offshore wind park that is world’s largest. It also developed the 400MW Anholt wind park in Denmark and retains a 50% stake in both parks.

Following the deal, it was announced that Carsten Krogsgaard Thomsen is stepping down as DONG’s chief financial officer after 11 years, to be replaced by Marianne Wiinholt, Senior Vice President of DONG Energy’s Customers & Markets division.