After several weeks of speculation, encouraged by the company itself, Siemens Energy now says it will not need a bailout. This was stated this Monday by the chairman of the supervisory board, Joe Kaeser, after the company’s management last week did not rule out an injection from the German State due to its multiple problems in its wind turbine manufacturing division. Despite rebounding strongly this Monday, its shares have accumulated a drop of more than 50% so far this year. “All business segments, except wind power, are doing well, better than the competition,” Kaeser added in the newspaper. Welt am Sonntag.
Last Thursday, Siemens Energy sank 30% on the stock market after it was learned that it had requested a bailout from the German Government. “The strong growth in the order book, especially in the former gas and electricity business areas, results in an increased need for guarantees for long-term projects. Taking this need into account, the executive committee is evaluating various measures to strengthen Siemens Energy’s balance sheet and to guarantee the necessary guarantees for growth,” the company explained in a statement. Despite ruling out aid from the State, the company is holding talks with the Executive of Olaf Scholz.
Siemens Energy is now in full search of loan guarantees worth close to 16 billion euros for future projects, after the parent company—which controls almost a third of the capital—said that it is not willing to continue disbursing money. Despite the good performance of Siemens, the energy division is being dragged down by the problems of the Spanish Gamesa, which it has integrated into its balance sheet this year and which is causing heavy losses.
Defective wind turbines
The economic losses derived from Gamesa’s failed wind turbine models already amount to 11 billion euros, and this is clouding the good progress of other Siemens Energy businesses: networks and construction of new power plants, among others.
Siemens Energy said in August it expected costs of €1.6 billion for repairs and replacement of faulty turbines due to quality defects in the two most recent models of onshore wind turbines. The German Ministry of Economy, led by Robert Habeck of the Green Party, is willing to financially support Siemens Energy. The argument is clear: Berlin considers it a strategic company for supply.
The management of Siemens Gamesa, the world’s largest maker of offshore wind turbines, was replaced in November last year with the aim of improving profitability problems. The company has 94,000 employees spread across 79 sites around the world, including sales and service offices, research and development centers and 15 factories to produce components such as wind blades. In Spain, more than 5,000 workers depend on the wind branch of the German firm.
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