German government to guarantee £6.5bn Siemens Energy rescue package
The German government is set to grant a €7.5bn euro (£6.5bn) loan guarantee to energy technology company Siemens Energy as part of a €15bn (£13bn) rescue package.
The DAX-listed company sought help from the government as it struggles with problems at its Gamesa wind energy subsidiary, including quality issues with previously installed wind turbines.
The company said on October 26 that “the strong growth in order intake, particularly in the former gas and power business areas, leads to a rising need of guarantees for long-term projects”.
It said it was in talks with partners, including the government, to ensure access to guarantees “to facilitate the anticipated strong growth”.
The German Economy Ministry said on Tuesday that the government’s precondition for helping was “that all stakeholders participate appropriately in safeguarding the company”.
This includes swallowing a dividend freeze and management bonuses until further notice.
The package comprises €15bn in guarantee lines, of which private banks would provide €12bn (£10.4bn) and with the company securing the rest in negotiations with “further stakeholders”.
The government agreed to backstop the bank guarantees to the tune of €7.5bn.
In addition, Siemens Energy and Siemens AG plan to negotiate the sale of shares in a joint venture that would bring in about two billion euros (£1.7bn) for Siemens Energy, the ministry said.
The government held talks with Siemens Energy, industrial conglomerate Siemens AG – which spun off Siemens Energy in 2020 and retains a minority stake in the company – and with private banks.
Siemens Energy is set to report its fourth quarter earnings on Wednesday 15 November.
Press Association – by Associated Press Reporters