“Money does not flow into the company’s coffers”

Wednesday, 25 November, 2015 - 16:45
Samuel Leupold is CEO at Dong Energy Wind Power. He has been a member of Dong Energy’s group management since 2013 and is responsible for the global wind power business of the company.
Samuel Leupold is CEO at Dong Energy Wind Power. He has been a member of Dong Energy’s group management since 2013 and is responsible for the global wind power business of the company.

Dong Energy intends to go public in one and a half years, at the latest. It will be the largest IPO in Danish history. OWI spoke with Samuel Leupold, CEO at Dong Energy Wind Power, about the company’s planned IPO as well as the future orientation of the company.

OWI: The sale of shares to Goldman Sachs in 2013 was probably inevitable due to the financial difficulties that the company was experiencing at that time. However, Dong is now doing very well. Why do you want to go public now?

Samuel Leupold: In 2013, the goal was to strengthen the balance sheet by increasing equity. The ­energy turnaround meant that things had to be written off that still had value in the old energy world, but no longer did in the new one. There is a completely dif­ferent rationale behind an IPO. It has nothing to do with ­strengthening the balance sheet. Shareholders simply sell their shares to other people. Money does not flow into the company’s coffers during this process.

OWI: In that case, what are Dong’s objectives with the IPO?

Leupold: Actually, you would have to talk to the owners about that. I suppose Goldman or the Danish government thinks the company will have better growth opportunities if its shares are traded on the stock market. This will make it easier to raise additional capital in the future. Another motive could be that the government thinks that it is not the best owner for an energy company that is increasingly operating not just in Denmark, but worldwide. This is a ­possible ­motivation, particularly in a ­political context. But I do not want to speculate on what the deciding factor was in this specific case.

OWI: Apropos “political context”: the deal with Goldman Sachs caused an uproar at home. Many Danes clearly want Dong to remain a state-owned enterprise. How will you deal with this?

Leupold: For me as a non-Dane, it is difficult to understand what ultimately happened there. On the one hand, I think people in ­Denmark like the company’s Danish identity. An IPO, however, does not necessarily mean that the company will become less Danish. Future shareholders might include Danish pension funds, for example. Or Danish individuals might acquire shares. An IPO does not mean that Dong has to fall into foreign hands.

OWI: But it does seem like people identify strongly with Dong as a state-owned ­company.

Leupold: Yes, that may be so. The company itself is one thing; the other is the issue of energy, where many sensibilities are affected and people are very emotional. Perhaps people are afraid that the company will become less environmentally friendly due to the privatisation. But that’s certainly not the case. One of the reasons why Goldman Sachs decided to become involved with the company is precisely because they appreciate the green growth potential.

OWI: Up till now, offshore wind has been Dong’s technology of choice in this field. Will this remain the case, or will the IPO and the new opportunities change things?

Leupold: Offshore wind and biomass! We are converting former coal-fired power plants into biomass or at least partially biomass-fired power plants. This is one part. The other part is indeed the expansion of offshore wind. This strategy is certainly still valid. We see our core competence in these two areas, and we intend to strengthen them.

OWI: You mentioned previously that the IPO is also a step towards being more of a global player and less of a state-owned company. Which global markets for offshore wind energy are of interest in the future for Dong?

Leupold: Generally speaking, even a majority co-ownership by the Danish State is not the opposite of a global player. The Danish State has proved in the past that it allows the company the flexibility to do business according to private sector criteria. ‘State-owned company’ and ‘global player’ may well go hand in hand. But to answer the question whether Dong will expand or not: yes, it will. This is particularly true in the offshore sector. If we want to remain number one, then we need to go where the market is and where it is accessible. We recently made very careful steps into the United States market. We now have local representatives in ­Massachusetts. Whether or not we will be able to carry out projects there is still an open question. The political discussion regarding the future energy supply system in Massachusetts is still ongoing.

OWI: And what is your ­assessment of the Asian ­market?

Leupold: It is also interesting. I spent some time in China two years ago and was able to see first-hand. Offshore energy is already a reality there and will certainly continue to grow. The technical challenges are different than here, and the motivation certainly is also. I think in China the real question is whether the market will be accessible for non-Chinese players. Taiwan is also already relatively far advanced. A2Sea for example was awarded a first contract to construct offshore turbines there.

OWI: Does this mean we will soon be seeing a tried and tested Danish cooperation in Taiwan?

Leupold: At least one of A2Sea’s ships including the company’s own crew is getting in on the action and will be constructing two test turbines. I cannot make any statements on the rest right now. But it is true that if we look at Taiwan and ask ourselves where offshore wind is feasible outside of Europe, then Taiwan is definitely an interesting country.

The interview was conducted by Katharina Garus.

Further information:

Dong Energy is preparing to go public

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