The ailing DAX group Siemens Energy is to be stabilized with guarantees of 15 billion euros. The federal government is contributing a guarantee of 7.5 billion euros, as the Ministry of Economic Affairs has now confirmed.
The aid package for Siemens Energy is in place. As the Federal Ministry of Economics announced today, the government is granting the ailing energy technology company a guarantee of 7.5 billion euros. It is part of the required guarantee lines totaling 15 billion euros. Of this, private banks are taking on loan commitments of twelve billion euros, some of which are secured by the federal guarantee. The company is expected to secure another three billion euros in negotiations with other parties involved.
No dividends and bonuses allowed
The federal government only wants to provide the guarantee if the other parties involved also make a contribution. Siemens Energy is expected to generate another two billion euros by selling shares in a joint venture with Siemens. According to previous reports, this could be Siemens India.
The agreement was preceded by weeks of negotiations. The Ministry of Economic Affairs spoke of intensive discussions with Siemens Energy and Siemens AG as the largest shareholder as well as several banks. While Siemens Energy receives state aid, the usual ban on dividends and bonuses applies.
High losses in the wind power business
Siemens spun off its power plant business in 2020 and listed Siemens Energy as an independent company. At the end of October it became known that Siemens Energy was talking to the federal government about state guarantees. Such guarantees are not uncommon in long-term transactions; for example, they protect customer down payments.
Siemens Energy is suffering from difficulties at its wind power subsidiary Siemens Gamesa, which repeatedly causes losses worth billions. Other business areas such as conventional power plant technology or power transmission are running solidly, but have recently been unable to offset the burdens from wind power.
On Wednesday, the company, which is listed in the German leading index DAX, will present figures for its financial year that ended at the end of September. A new billion-dollar loss is expected.