The German government, Siemens AG and other parties involved in discusions to cover billions of Euros in project-related guarantees for Siemens Energy have agreed a deal in principle, news agency Reuters has reported.
Some details of the deal are still under discussion, but it is understood Siemens AG, Siemens Energy’s top shareholder with a stake of 25.1%, was prepared to provide some of the guarantees.
The agreement still needs to be formally drawn up and approved by all stakeholders, the news agency has reported, with no time scale disclosed.
The move follows news in October Siemens Energy was in talks with the German government, banks and Siemens AG over what sources said were €15bn in guarantees for project and warranty bonds needed to safeguard the company’s €109bn order book.
Higher interest rates, the company’s wind turbine problems and S&P’s move in July to downgrade the group’s long-term credit rating to BBB- all mean banks have become stricter in granting these safeguards.
Up to 30% of the orders are in downpayments, which is the share that needs to be protected by guarantees Reuters reports.
Siemens Energy declined to comment on the provisional deal, but the news agency reported a spokesperson for Siemens AG as saying the company remained in “very constructive talks to define the best possible solution in the interests of all parties involved”.
Germany’s Economy Ministry also said talks were ongoing.