Deal on Siemens Energy guarantees to be presented Wednesday -sources

(Reuters) – Siemens Energy (ENR1n.DE) will present a deal for billions of euros in project-related guarantees backed by the German government during its results announcement on Wednesday, sources familiar with the matter told Reuters.

The company in October disclosed talks with the German government, banks and Siemens AG (SIEGn.DE) over what sources said were 15 billion euros ($16 billion) in guarantees for project and warranty bonds needed to safeguard the company’s 109 billion euro order book.

Of the 15 billion, banks involved in the talks will bear 12 billion euros ($12.84 billion), of which the state would take on 7.5 billion euros as a backstop, two sources said, confirming an earlier report by Handelsblatt newspaper.

The Handelsblatt said a solution was also being found for the remaining 3 billions, without giving details.

“The aim is to have an agreement ready by Wednesday,” a third source told Reuters, adding that final details would be determined following board meetings on Tuesday.

Siemens Energy makes gas and wind turbines as well as large converter stations, vital energy equipment for the country’s efforts to gradually phase out fossil fuels, prompting Berlin to seek backing for what it considers a systemically important company.

Siemens Energy and the German economy ministry declined to comment on the report.

Siemens AG, Siemens Energy’s top shareholder with a 25.1% stake, will be indirectly involved in the guarantees, Handelsblatt said.

The former parent company is buying an 18% stake in a joint venture in India from Siemens Energy for more than 2 billion euros, with a further 5% stake in the company to serve as collateral for the guarantees, Handelsblatt reported.

In addition, Siemens Energy would defer its annual 250-million-euro payments for the use of the trademark rights, it reported.

Shares in the company were up 4.8% as of 1210 GMT on the news.

($1 = 0.9349 euros)

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