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BERLIN: The German government is in talks with Siemens Energy about state guarantees, the company said on Thursday, after major setbacks at the group stemming from its wind division, which has booked billions in losses amid quality issues.
A spokesperson for the German economy ministry also confirmed the talks, describing them as “close and trustworthy”. Siemens Energy shares slid to all-time lows on the news, down more than 30% at 0912 GMT.
Quality problems emerged this year at the power engineering company’s wind unit Siemens Gamesa centred on rotor blades and gears in newer onshore wind turbines, drawing the ire of top shareholder and former parent Siemens AG.
Due to the losses, Siemens Energy fears it will struggle to secure guarantees from banks, and has approached the government and Siemens to obtain a guarantee framework, said business news weekly WirtschaftsWoche, which first reported the talks.
The weekly, along with Spiegel magazine, said Siemens Energy is seeking up to 15 billion euros ($15.81 billion) in guarantees.
The German state would assume liability for 80% of an initial 10 billion euro funding tranche, while banks would be liable for the remaining 20%, WirtschaftsWoche said.
A spokesperson for Siemens AG, which according to the report was being asked to guarantee a second tranche of the remaining 5 billion euros, declined to comment. Siemens remains an anchor investor in Siemens Energy, retaining a 25.1% stake.
In a statement confirming the talks, Siemens Energy also said its financial results in 2023 are expected to be fully in line with previous guidance, and that Siemens Gamesa is working through its quality issues.
It did not comment on the financial details of a targeted package. Siemens Energy’s budgeting process is still ongoing and no decisions on the 2024 annual budget or any specific financing measures have yet been taken by the executive board, it said.
In August, Siemens Energy said the problems at Gamesa would be the main factor inflating its net loss in 2023 to 4.5 billion euros, more than six-fold year-on-year.
Spiegel magazine cited sources close to the company as saying the losses might turn out to be higher.
Top managers at Siemens Gamesa, the world’s largest maker of offshore wind turbines, have been replaced without resulting improvements in profitability.
Globally the company operates 79 sites, including sales and service offices, research and development centres, and 15 factories to produce components such as blades.
A spokesperson for the German economy ministry also confirmed the talks, describing them as “close and trustworthy”. Siemens Energy shares slid to all-time lows on the news, down more than 30% at 0912 GMT.
Quality problems emerged this year at the power engineering company’s wind unit Siemens Gamesa centred on rotor blades and gears in newer onshore wind turbines, drawing the ire of top shareholder and former parent Siemens AG.
Due to the losses, Siemens Energy fears it will struggle to secure guarantees from banks, and has approached the government and Siemens to obtain a guarantee framework, said business news weekly WirtschaftsWoche, which first reported the talks.
The weekly, along with Spiegel magazine, said Siemens Energy is seeking up to 15 billion euros ($15.81 billion) in guarantees.
The German state would assume liability for 80% of an initial 10 billion euro funding tranche, while banks would be liable for the remaining 20%, WirtschaftsWoche said.
A spokesperson for Siemens AG, which according to the report was being asked to guarantee a second tranche of the remaining 5 billion euros, declined to comment. Siemens remains an anchor investor in Siemens Energy, retaining a 25.1% stake.
In a statement confirming the talks, Siemens Energy also said its financial results in 2023 are expected to be fully in line with previous guidance, and that Siemens Gamesa is working through its quality issues.
It did not comment on the financial details of a targeted package. Siemens Energy’s budgeting process is still ongoing and no decisions on the 2024 annual budget or any specific financing measures have yet been taken by the executive board, it said.
In August, Siemens Energy said the problems at Gamesa would be the main factor inflating its net loss in 2023 to 4.5 billion euros, more than six-fold year-on-year.
Spiegel magazine cited sources close to the company as saying the losses might turn out to be higher.
Top managers at Siemens Gamesa, the world’s largest maker of offshore wind turbines, have been replaced without resulting improvements in profitability.
Globally the company operates 79 sites, including sales and service offices, research and development centres, and 15 factories to produce components such as blades.
