International banks take over Siemens Energy's federal guarantee for major project
Federal government offers backing for Siemens Energy projects - Siemens Energy has swapped the Federal guarantee with a new arrangement.
Siemens Energy's financial struggles have taken an interesting turn, with a consortium of 23 international banks now taking over the federal guarantee once provided by the German government. This guarantee, which totals 15 billion euros, is crucial for Siemens Energy's expected growth during a challenging phase.
The company's CFO, Maria Ferraro, explained, "The federal government's guarantee was vital in 2023 during a tough period, ensuring our anticipated growth spurt entered the horizon unimpeded."
Siemens Energy's woes began with its wind-energy subsidiary, Siemens Gamesa, reporting significant losses. These losses, combined with costly product failures and a dearth of orders, left the company in a precarious position. The company needed financial stabilization to execute its substantial order backlog.
In late 2023, the German government stepped in, announcing a €15 billion guarantee package for Siemens Energy. This package, a public-private risk-sharing arrangement, saw the German government providing €7.5 billion in government-backed guarantees, with the remaining €7.5 billion coming from private lenders and stakeholders. Siemens Energy agreed to suspend dividends and executive bonuses until obligations were met, and Siemens AG reduced its ownership stake in Siemens Energy, assuming potential first-loss responsibility.
Recent developments show Siemens Energy successfully navigating the crisis, albeit with the wind-turbine division still grappling with issues. However, there's been a strong surge in orders for other divisions such as Grid Technologies and Gas Services. As a result, Siemens Energy raised its financial forecast for fiscal year 2025, anticipating revenue growth of 13% to 15% and a profit margin of 4% to 6% before special items.
Despite these positive signs, there's been no mention in the latest search results of a majorproject in Berlin or a guarantee takeover by international banks for such a project. But one thing's clear, the international banking consortium is providing Siemens Energy the financial lifeline it needs to continue its growth trajectory.
- The international banking consortium, offering necessary support during Siemens Energy's financial challenges, has taken over the federal guarantee for a major Siemens Energy project, worth 15 billion euros, crucial in its growth and success.
- With several global banks now involved in Siemens Energy's financial framework, the energy, finance, and business industries will be closely watching the company's progress, as its employment policy, including various employment policy decisions, continues to evolve in this transformation period.
