2023-10-27 13:09:03
The German equipment manufacturer announced Thursday that it was negotiating with the government to obtain aid, following significant setbacks in its wind power unit. The announcement, confirmed by a spokesperson for the Ministry of the Economy, put a stop to the dizzying fall in the company’s shares.
Quality problems emerged this year at the company’s wind unit, Siemens Gamesa, angering Siemens AG, the company’s largest shareholder.
“The German government is aware that Siemens Energy is a transformationally relevant company for Germany as an economic location,” another government spokesperson said.
Siemens Energy shares rose 6.96% to 7.33 euros at 12:02 GMT following falling more than 35% on Thursday, a move that erased around 3 billion euros from the company’s market capitalization.
Clemens Fuest, president of the Ifo economic institute, told Archyde.com there was “no convincing justification” for the state aid.
“The aid means a transfer of money from taxpayers to the creditors and shareholders of Siemens Energy, who would effectively become responsible. It is up to the creditors and shareholders to restructure the company,” Clemens Fuest said.
Juergen Molnar, an analyst at brokerage RoboMarkets, advised investors to avoid Siemens Energy shares, “with or without government aid.”
“If there is a pain point for investors at the moment, it is financing problems. With interest rates rising, even a good business model can quickly find itself in the red,” he said. he declared.
(Reporting Christian Kraemer, Andreas Rinke, Zuzanna Szymanska; writing by Tom Sims; French version Mariana Abreu, editing by Kate Entringer)
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