Danish state-owned utility Dong Energy IPO-DONG.CO said on Tuesday it would keep its oil and gas unit as part of its anticipated initial public offering (IPO), but that it would write down about 16 billion Danish crowns ($2.32 billion) of the business.
The world’s biggest offshore power developer announced in September plans to pursue an IPO of its shares within 18 months.
A month later it said it would conduct a strategic review of its Exploration & Production (E&P) business.
“DONG Energy has decided to keep E&P as part of the planned IPO,” the company said on Tuesday.
It said it was still its aim to build a clean-energy company and that the cash flows from its E&P business would be part of the funding for its investments in renewable energy.
DONG has already said it planned to divest its gas distribution business, and gas and oil pipelines ahead of the listing as it wants to focus more on offshore wind and other renewable energy.
The company said that the write-down reflected a continued decline in oil and gas prices, reduced reserve estimates as well as “project-specific factors”.
It said its Hejre project in the Danish part of the North Sea continued to face “significant challenges”.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) in the E&P business rose by 1 billion Danish crowns ($147 million) to 2.9 billion in the third quarter from a year
earlier helped by higher production from the Ormen Lange gas field off Norway and cost savings.
DONG Energy’s annual report is due to be published on February 4.
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