• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Business»Explainer: Why is Siemens Energy seeking $16 billion state guarantees?
Business

Explainer: Why is Siemens Energy seeking $16 billion state guarantees?

October 29, 2023No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email
The logo of energy technology company Siemens Energy

The logo of energy technology company Siemens Energy is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo Acquire Licensing Rights

Oct 29 (Reuters) – Talks between the German government and Siemens Energy (ENR1n.DE) to strike a deal over around 15 billion euros ($15.9 billion) in guarantees for the power equipment firm continued over the weekend, according to two people familiar with the matter.

Shares in the company, which was spun off from former parent Siemens (SIEGn.DE) in 2020, fell as much as 39% to a record low last week after the discussions became public, the latest blow after the company unveiled major quality issues at its wind turbine unit Siemens Gamesa.

The sources in this story declined to be identified due to the sensitivity of the matter.

Here are answers to the most pressing questions:

IS THIS A GOVERNMENT BAIL-OUT?

No.

The company is seeking government guarantees to help realise its pipeline of large industrial projects, mainly in Siemens Energy’s former gas and power division, which builds and services gas turbines and manufactures large power converters stations.

Such guarantees, usually issued by companies and the banks they work with, are commonly issued for sizeable projects because industrial firms need to provide evidence to their customers that they can meet certain liabilities during the construction process.

In other words, it’s a financial backstop that ensures the project’s viability.

Big industrial orders that run over several years usually require these guarantees to secure principals’ downpayments as well as performance guarantees and warranties over a 3-5 year period or longer to ensure the viability of the project, according to a third source familiar with the matter.

See also  111 Tired Quotes You Can Relate to (But Also Get a Boost of Energy From)

This holds true for all major industrial firms and poses no problem as long as banks provide the necessary volume of guarantees, which in reality are almost never drawn.

According to data from the International Chamber of Commerce looking at the five-year period between 2016-2022, just 0.2% of such performance guarantees were ultimately drawn.

WHAT’S THE PROBLEM?

Siemens Energy’s order book has swollen to a record 109 billion euros, as of the end of June.

Around 20%-30% of that is in downpayments, which is the share that needs to be backstopped by guarantees, two separate people familiar with the matter said, adding that around half of that, or about 15 billion euros, needed to be covered by the government, banks and Siemens.

Banks, however, have become stricter due to higher interest rates, Siemens Energy’s deepening wind turbine problems as well as S&P’s move in July to downgrade the company’s long-term credit rating to BBB-, just one notch above junk, two of the sources said.

To make sure it can get the guarantees to fulfil its order backlog, Siemens Energy has turned to the government.

A spokesperson for the German Economy Ministry said on Sunday the government was in close contact with Siemens Energy and that discussions were ongoing, without elaborating.

WILL SIEMENS HELP WITH GUARANTEES?

Siemens owns a 25.1% stake in Siemens Energy and has not ruled out helping. Berlin has asked Siemens Chief Executive Roland Busch to provide some of the guarantees, and the expectation is that the German industrial giant will eventually budge, two other people familiar with the situation said.

See also  Biden's State of the Union Speech Received Lower 'Very Positive' Ratings than Predecessors

However, Siemens is hesitant, according to the people, primarily due to the perceived mismanagement at the former subsidiary and the subsequent share price collapse.

Siemens still provides around 7 billion euros of performance guarantees to projects Siemens Energy is working on, significantly down from the 40 billion euros at the time of the spin-off around three years ago.

It has a vested interest in the stability of Siemens Energy because, under German corporate laws, it remains liable for the former division for five years after the spin-off.

Siemens declined to comment.

WHAT ELSE COULD SIEMENS ENERGY DO TO STRENGTHEN ITS FINANCES?

Apart from seeking guarantees from the government, banks and Siemens, Siemens Energy said it is “evaluating various measures to strengthen the balance sheet”, without elaborating further.

This includes routine considerations over a possible capital increase, two of the sources said, adding these were preliminary and no firm decisions hade been made.

In addition, the company is weighing the sale of smaller divisions to boost cash, following a recent deal to sell its high-voltage component division Trench to private equity fund Triton.

Siemens Energy declined to comment.

($1 = 0.9466 euros)

Reporting by Andreas Rinke in Berlin, Christoph Steitz and Emma-Victoria Farr in Frankfurt, Andres Gonzalez and Pablo Mayo Cerqueiro in London, Alexander Huebner in Munich and Tom Kaeckenhoff in Duesseldorf; Editing by Josephine Mason and Susan Fenton

: .

Acquire Licensing Rights, opens new tab
Billion energy Explainer guarantees seeking Siemens State
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025

Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

May 7, 2025

Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

May 7, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Video Shows Biden Admin Dumping Migrants on Texas Border City Streets

May 15, 2023

Elon Musk Dreams of Turning X/Twitter into a Dating and Banking Hub

November 1, 2023

They Lied, Biden Expands Obamacare to Illegal Aliens

May 1, 2023

Anti-Israel Mob Attacks Rihanna for Partnering with Israel Football Association-Tied PUMA

November 24, 2023
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Bisphenol A detected in almost all Europeans: report

September 14, 2023

Speaker McCarthy Knocks Florida Gov. DeSantis for Not ‘Sitting Down’ With Woke Disney

April 29, 2023

Sports Radio Host Fired for ‘Barbie’ Comments to Female Reporter

July 31, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.