Siemens Energy Takes On €4 Billion Credit Line After Gamesa Loss

(Bloomberg) -- Siemens Energy AG has obtained a €4 billion ($4.3 billion) credit line that replaces an existing facility of its own as well as for its loss-making Gamesa wind-turbine unit.

The new five-year revolving facility refinances an existing €3 billion credit line for Siemens Energy and a €2 billion one for Siemens Gamesa Renewable Energy SA, a company spokesperson told Bloomberg. A consortium of 26 international banks committed to the new debt, he said. 

The financing, which is tied to the company’s sustainability performance, can be extended twice by one year. This structure is in line with typical revolving facilities for investment-grade firms, serving as a primary backup source of liquidity for general corporate purposes and refinancing. 

The deal came into effect on Wednesday, just two days after Siemens Energy had its annual general meeting, where its management pledged to focus on turning around the wind business after facing pressure from shareholders.

“Our focus remains on solving the quality problems in our onshore wind business and making the most of the growth potential for the rest of the company,” said Christian Bruch, CEO of Siemens Energy, in the earnings release statement.

Siemens Energy, which now has the lowest investment-grade rating of BBB- by S&P Global Ratings, secured a €15 billion deal last year to weather losses at its wind turbine unit. Gamesa, which has been battling faulty turbines and unprofitable contracts, posted more than €4 billion of losses for 2023, according to a company presentation this month.

©2024 Bloomberg L.P.