Siemens Energy chairman says ‘no need’ for state money

SIEMENS Energy supervisory board chairman Joe Kaeser pushed back against suggestions the troubled turbine maker may need a taxpayer-funded bailout from the German government.

“The company obviously doesn’t need money from the state,” Kaeser told newspaper Welt am Sonntag. “All segments apart from the wind business are doing well, partly better than at the competition,” he added.

The company confirmed on Thursday (Oct 26) that it’s in talks with the government. According to sources familiar with the matter it’s seeking loan guarantees worth as much as 16 billion euros (S$23.16 billion) for future projects.

Siemens Energy earlier this year forecast a 4.5 billion euros loss for fiscal 2024 despite assurances it had finally come up with a plan to address problems with certain wind turbines at its Spanish Gamesa division. S&P in July downgraded it to BBB- from BBB.

The company is seeking backstops over a two-year period after major shareholder and former parent Siemens indicated it was no longer willing to help, sources familiar with the matter have said. The company said it’s also speaking to banks, and Germany Chancellor Olaf Scholz described the talks, which are confidential, as “very good”.

The wind turbine losses are clouding Siemens Energy’s other profitable businesses and the company’s total order backlog of 110 billion euros. The situation is therefore different to last year’s bailout of gas giant Uniper – which was on the brink of bankruptcy after Russia stopped supplying gas and had used 13.5 billion euros in equity injections, along with credit lines.

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As former chief executive officer of Siemens, Kaeser was the main architect of the company’s current structure. He also orchestrated the spinoff of Healthineers in 2016 and Siemens Energy in 2020.

“If you read ‘state aid’ as an investor then panic is pre-programmed. Especially in an already highly nervous market,” Kaeser said. “In fact, it is predominantly about how the enormous growth opportunities in the area of wind energy and energy transmission can be supported, through order guarantees if needed.” BLOOMBERG