Siemens Energy AG has reached a provisional agreement with the German government and main shareholder Siemens AG to cover billions in project-related financial guarantees, Reuters reported.
Some details of the deal, which also involves additional parties, are still being discussed, Reuters said, citing people familiar with the talks. Siemens Energy shares rose as much as 7.4% on Thursday, while Siemens traded roughly 2% higher.
A deal would end weeks of talks and pave the way for Siemens Energy to win large-scale contracts for electricity grids and gas turbines. The company has been seeking the backing after its credit rating was downgraded in July and Siemens, its former parent with a 25.1% shareholding, indicated it was no longer willing to help it weather a string of losses at its Gamesa wind-turbine unit.
Talks involved loan guarantees for about €15 billion ($16.1 billion). A spokesman for Siemens Energy declined to comment. Siemens didn’t immediately respond to a request for comment.
Read more: Germany Pressures Siemens to Support Troubled Wind-Turbine Maker
Siemens Energy’s share price has slumped roughly 45% this year, as problems at Gamesa mounted. 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 company is still conducting a broad review of the issues to determine a final cost. Siemens Energy now expects a €4.5 billion net loss for the year.
Government officials have said the company is critical for the nation’s transition to renewable energy as it fends off green-technology competition from China.
Read more: Siemens Energy Weighs New Turbine in Bid to End Troubles
--With assistance from Petra Sorge, Kamil Kowalcze, Arne Delfs and Eyk Henning.
Author: Wilfried Eckl-Dorna
