Agreement on guarantees
The state guarantees Siemens Energy with up to 7.5 billion euros
November 13, 2023, 3:19 p.m
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According to negotiating circles, the crucial details in the struggle for state support for order guarantees for Siemens Energy have been clarified. Major shareholder Siemens is also participating. The agreement is expected to be announced in the middle of the week when the energy technology group presents its balance sheet.
According to negotiating circles, a concrete solution is on the table in the weeks-long tug-of-war over guarantees worth billions for the energy technology group Siemens Energy. 12 billion of the required 15 billion euros in guarantees for future major projects should come from the banks, and the federal government would be responsible for a maximum of 7.5 billion euros of this if necessary, said three people familiar with the plans.
The former parent company Siemens AG, which still holds 25.1 percent of Siemens Energy, does not give any guarantees itself, the insiders emphasized. However, Siemens AG is buying 18 percent of the joint Indian subsidiary from Siemens Energy for more than two billion euros, thereby strengthening the Munich-based energy technology group’s balance sheet.
“That makes it possible for others to give guarantees,” said one of the insiders. During the negotiations, the federal government had insisted on Siemens AG’s participation. Initially there was talk that the banks and the federal government would share the first ten billion euros in guarantees, and Siemens AG would contribute the remaining five billion euros.
It initially remained unclear where the remaining three billion would come from. But there is a solution for that too, said one of the insiders. Siemens and Siemens Energy did not want to comment on the information, the Federal Ministry of Economics said through a spokeswoman that there was no new status. According to Reuters information, the approval of the supervisory boards of both companies is still pending. Siemens Energy wants to present the results at the annual press conference on Wednesday in Munich at the latest.
Help is not entirely altruistic
Siemens Energy had turned to politicians with the desire for guarantees. Because of the deteriorated credit rating, the banks were hesitant to take on the implementation risks alone for major projects worth more than 100 billion euros that are on Siemens Energy’s books. The group pointed out that its foreign competitors also benefited from government guarantees. However, Siemens AG was reluctant to become more involved there again after spinning off the energy technology business three years ago.
The technology group had already reduced its guarantees for energy projects from joint times to seven billion euros. He is now only helping the former subsidiary indirectly – not entirely altruistically: According to insiders, Siemens AG is increasing its stake in the Indian business to 69 percent from the previous 51 percent.
The listed Siemens Ltd was not unbundled when the group was split up for tax reasons. According to an insider, the five percent of Siemens Ltd remaining with Siemens Energy serves as collateral for guarantees. In addition, the technology group Siemens Energy defers the 250 million euros due annually for the use of the rights to the “Siemens” brand, but receives interest in return.