The German government, Siemens AG, and other stakeholders engaged in discussions have reportedly reached a preliminary agreement on covering project-related guarantees worth billions of Euros for Siemens Energy, according to sources cited by Reuters.
While certain details of the deal remain subject to ongoing discussions, Siemens AG, holding a 25.1% stake in Siemens Energy, is said to be prepared to contribute some of the guarantees. The agreement, in principle, awaits formalization and approval from all parties involved, and no specific timeline for this process has been disclosed.
This development follows reports from October, revealing Siemens Energy's negotiations with the German government, banks, and Siemens AG for approximately €15 billion in guarantees. These guarantees are intended to support project and warranty bonds, safeguarding Siemens Energy's substantial €109 billion order book.
Challenges such as higher interest rates, issues with the company's wind turbine division, and a downgrade of the group's long-term credit rating by S&P in July to BBB- have collectively contributed to a more stringent approach by banks in granting these safeguards.
Reportedly, up to 30% of the orders in Siemens Energy's €109 billion order book consist of downpayments, necessitating guarantees to protect this portion, as per Reuters.
Siemens Energy declined to comment on the provisional deal, while a spokesperson for Siemens AG was quoted by the news agency as stating that the company remains engaged in “very constructive talks to define the best possible solution in the interests of all parties involved.”
The German Economy Ministry confirmed ongoing discussions, indicating a collaborative effort to navigate the complexities involved in securing the necessary guarantees for Siemens Energy's substantial order book.