Siemens Energy: Independence from State Guarantees
Siemens Energy has taken a significant step in its corporate history by redeeming state guarantees ahead of schedule. This decision is the result of positive operational developments for the company over the past two years and underscores the confidence in the stability and future viability of Siemens Energy.
Background
At the end of 2023, Siemens Energy found itself in a precarious situation, particularly due to high losses in the wind power sector. These losses led to banks being more hesitant in granting guarantees, which Siemens Energy urgently needed to fulfill its long-term large orders. Negotiations with the federal government regarding state support became public knowledge, resulting in a dramatic drop in the share price by 40 percent.
Early Redemption of Guarantees
Siemens Energy has now redeemed state guarantees amounting to 11 billion euros ahead of schedule and has instead entered into a new guarantee agreement for 9 billion euros with a consortium of 23 international banks. This agreement has a term of five years and demonstrates the banks’ confidence in the stability and future viability of the company.
Importance for Investors
The early redemption of state guarantees and the new guarantee agreement are of great significance for investors. They pave the way for future dividends and stock buybacks, underscoring the company’s stability amidst the current energy crisis. The prospect of dividend payouts and stock buybacks is seen as a positive market development and could increase interest in Siemens Energy shares.
Future Prospects
The positive operational developments and the early redemption of state guarantees suggest that Siemens Energy is on the path to independence and stability. This could enable the company to better position itself in a competitive market and achieve long-term success.