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ATP reaps DKK4bn profit on DONG Energy after IPO

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Denmark’s ATP has made a profit of around DKK4bn (€537m) on its investment in the country’s DONG Energy following its IPO on 9 June, and cited the fund’s unusually active approach to the investment, but mainly staff at the company itself, as factors behind the investment’s success.

Carsten Stendevad, chief executive of the DKK705bn statutory pension fund, told IPE: “In a moment of need for this company, we came in with a sizeable direct capital infusion and today we have both contributed to the growth of a leading global sustainable energy company and made DKK4bn for our members.”

The company success was part of a green energy story, he said.

DONG Energy yesterday announced the result of its initial public offering (IPO), with a final offer price of DKK235 per offer share. 

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The official listing on the Nasdaq Copenhagen exchange took place on 9 June, and in early trading the shares had risen 10% from the offer price.

Before the offering, which saw all shareholders selling a combined 17.4% of their holdings in DONG Energy, ATP held 4.9% in the energy company, US banking group Goldman Sachs held 18% via its subsidiary New Energy Investment, and Denmark’s largest commercial pension fund PFA held a 1.8% stake.

After the offering, ATP’s stake shrank to 4.0%, and Goldman Sachs’ holding to 14.7%.

The Danish state continues to be the majority shareholder after the IPO, and now owns 50.4% of DONG Energy.

A PFA spokesman said the pension fund did not comment on individual investments.

ATP said it had paid in all DKK3.2bn for its stake in DONG Energy, which it took two years ago, with DKK2.2bn of this as direct equity investment and the rest held indirectly.

At the introduction price, its gain on the investment would have been 130% or around DKK3.5bn, but following the 10% market rise in the share price, that gain swelled to DKK4bn, it said.

Asked to say how ATP’s work had contributed to the large investment return, Stendevad said that alongside Goldman Sachs, it had been very active in processing the deal but that in the boardroom of DONG Energy, Claus Wiinblad — ATP’s senior vice president, Danish equities — had been part of the process.

“We have a history of being active owners and we have been more active here than we have normally been, given the size of the investment,” he said.

“But clearly the credit for today goes to the employees of DONG Energy,” he said.

Despite market and political turmoil, the staff had kept their focus on the business, Stendevad said.

The part-privatisation of the company was controversial at the time, largely due to opposition to Goldman Sachs’ involvement in the deal. The Socialist People’s Party (SF) withdrew from then-prime minister Helle Thorning-Schmidt’s centre-left coalition government in protest.

Stendevad said it was extraordinary what the company had achieved, and this was notable in comparison to some energy companies in the sector in other countries.

“This has required a business and execution plan, but it has also required capital — other companies have gone on a different path,” he said.

“When we entered this process, there was broad consensus from outside that capital was needed, and very few investors were willing to put in the capital.

“In the end, we believed in the management and the plan they had,” he said, adding that in order to make a good return, investors had to be willing to put in the time and energy.

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