The German government has reached a decision to backstop Siemens Energy with guarantees worth nearly €8bn as part of a deal with other stakeholders to help the company fulfil orders.
The German Federal Ministry for Economic Affairs and Climate Action, the Federal Chancellery and the Federal Ministry of Finance is granting Siemens Energy a €7.5bn guarantee.
The amount forms part of guarantee lines totalling €15bn, which will be agreed with private banks and other stakeholders.
The government’s precondition is that all stakeholders participate appropriately in safeguarding the company.
Private banks will grant Siemens Energy a guarantee line totalling €12bn and Siemens Energy will secure a further €3bn in negotiations with other stakeholders.
Of the €12bn granted to Siemens Energy by banks, for a guarantee line of €11bn, Berlin will provide a pro rata guarantee of €7.5bn, which is 50% of the total guarantee requirement.
A consortium of banks will acquire a share of €3.5bn of the guarantee line and private banks will also take over a guarantee line of €1bn without a guarantee from the federal government, which is secured by a first-loss tranche by Siemens.
The first loss tranche will be used as a priority in the event of a claim.
In addition, Siemens Energy and Siemens intend to negotiate the sale of shares in a joint venture with a cash inflow for Siemens Energy worth €2bn.
In addition, a customary dividend ban and, for the management board, a bonus ban applies during the use of the measure.
This agreement is subject to the successful completion of the necessary review processes on the part of the federal government, the approval of relevant bodies and Siemens Energy and Siemens.
