7.5 billion euro guarantee for Siemens Energy
The German government is providing Siemens Energy with a guarantee of 7.5 billion euros. It is part of the required guarantee lines totaling 15 billion euros that have been agreed with private banks, among others, as announced by the Federal Ministry of Economics on Tuesday. This was preceded by weeks of negotiations.
In detail, private banks will grant Siemens Energy guarantee lines totaling 12 billion euros, which will be partially secured by the federal government's guarantee. The company is to secure a further 3 billion in negotiations with other parties. The federal government will only provide the guarantee if the other parties involved also make their contributions.
Siemens Energy is to receive a further 2 billion through the sale of shares in a joint venture with Siemens. According to earlier reports, this could be Siemens India. Siemens is the former parent company of Siemens Energy. The company spun off its power plant business in 2020 and went public as Siemens Energy.
At the end of October, it became known that Siemens Energy was talking to the German government about state guarantees. Such guarantees are not uncommon in long-term transactions, for example to secure advance payments from customers.
Siemens Energy is suffering from difficulties at its wind power subsidiary Siemens Gamesa, which has repeatedly caused problems and losses running into billions. Although other business areas such as conventional power plant technology and power transmission are doing well, they have recently been unable to offset the burdens from wind power. On Wednesday, Siemens Energy will present its figures for the fiscal year ending in September. A billion-euro loss is expected.
The Federal Government is providing a portion of the required 15 billion euro guarantee lines for Siemens Energy, aiming to secure their 12 billion euro guarantee lines from private banks. The Federal Government's guarantee is essential, as it is contingent on other parties also making their contributions.
Source: www.dpa.com
