German energy giant Siemens Energy has floated a 4.05 billion-euro ($4.28 billion) bid for a minority stake in its heavily troubled wind turbine unit Siemens Gamesa, hoping to unwind one of the complex ownerships that significantly affect its stock.
The share price in the giant company’s offer is about 18.05 euros, an increase of 27.7% from the last unaffected closing price of Gamesa in Spain, which amounted to 14.13 euros, on May 17, Reuters reported.
Germany’s Siemens Energy is facing mounting pressure from shareholders to take full control of the troubled wind turbine company, in which it has a 67 percent inherited stake, after it split from its previous parent.
(1 EUR = 1.06 USD)
Although Siemens holds a majority stake, it has not been able to make a significant impact on dealing with product delays and operational issues at Gamesa, which has issued three profit warnings in less than a year.
The head of the German energy company’s supervisory board, Joe Kaiser, said it was now very important to stop the deteriorating situation at Siemens Gamesa as quickly as possible, and to begin the process of re-arranging the value being created quickly.
Meanwhile, Siemens Energy is studying options to acquire the remaining stake in troubled Gamesa, a deal that could take place by summer, according to reports seen by the specialist energy platform.
The company announced that it plans to finance up to 2.5 billion euros ($2.65 billion) from the deal in shares or stock-like instruments, adding that the first step may be to raise capital without subscription rights.
write off the company
Siemens Energy said that the remaining amount will be financed by debt and cash, pointing out that it aims to write off Siemens Gamesa, as Spanish stock market regulations allow this once it reaches 75% of the ownership.
The full integration of Gamesa is expected to simplify Siemens Energy’s structure and provide a more cohesive business model that meets the needs of legacy energy assets, such as coal technologies, and transitional technologies, such as gas and renewables.
Siemens Energy CEO Christian Broch said the deal comes at a time of significant changes affecting global energy, adding: “Our conviction is that current geopolitical developments will not set back the energy transition.”
The company explained that the deal will save up to 300 million euros annually in costs, within 3 years, due to more convenient supply chain management, joint management, and joint research and development, and the deal is expected to end in the second half of this year.
Siemens Energy’s gains turned into losses during the current fiscal quarter, as the crises facing the wind turbine manufacturer Gamesa, in addition to the lack of supply chains and the impact of demand, were among the main reasons for these losses.
And the preliminary results of the company, announced on May 11, revealed that it had achieved losses of 252 million euros ($265 million), compared to profits of 31 million euros ($32.73 million) in the same period last year.
Losses before interest and taxes amounted to 77 million euros, while profits for the second quarter of last year were about 197 million euros, and the company’s revenue rose to 6.58 billion euros, compared to 6.48 billion euros in 2021.
Meanwhile, Siemens Gamesa is preparing to launch France’s largest renewable energy project, which is expected to combine offshore wind turbine containers with the manufacture of their blades.
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