Beleaguered wind turbine manufacturer Siemens Energy has reportedly secured a multi-billion-euro loan deal in principle with the German Government, its top shareholder other parties in project-related guarantees.
The deal is viewed as critical for Siemens Energy (Xetra: ENR) to take on future large scale projects, with a string of losses at the Gamesa wind unit becoming an industrial debacle for Germany.
Faults in thousands of wind turbines have left the company with a repair bill of at least €1.6 billion ($1.7 billion), though the final cost hasn’t yet been determined.
It was revealed in October that Siemens Energy was seeking up to 16 billion euros in state aid in order to protect its order book – with shares plummeting 40% on the news.
Reuters reports that the gas and wind turbine manufacturer has agreed a deal in principle with the Bundestag, along with top shareholder (25.1%) Seimens AG and other parties.
The news agency said up to 30% of the Siemens Energy order book is in downpayments, which is the share that needs to be backstopped by guarantees.
Around half of that – 15 billion euros – needs to be covered by the government, banks and Siemens.
Siemens Energy is seen as a systematically relevant firm to help Berlin to gradually phase out fossil fuels.
Reuters reports that the agreement is still to be formally drawn up and approved by shareholders, citing people with knowledge of the matter.
Earlier this week, German Chancellor Olaf Sholz said he is “confident that we will find a good solution very soon if everyone fulfills their responsibilities now.”
Siemens Energy had no comment, Siemens AG said “very constructive talks” are underway.
The guarantees have become crucial after the company earlier this year forecast a €4.5 billion loss for fiscal 2024 despite assurances it had finally come up with a plan to address problems with certain wind turbines. S&P in July downgraded its rating.