SGRE in 'final negotiations' to buy Senvion assets

Siemens Gamesa Renewable Energy (SGRE) is in talks to acquire "selected services and onshore assets" in Europe from rival manufacturer Senvion.

SGRE are in exclusive talks to buy selected parts of Senvion's business
SGRE are in exclusive talks to buy selected parts of Senvion's business

The companies entered an exclusivity agreement allowing Siemens Gamesa to pursue negotiations for the sale.

Siemens Gamesa and Senvion expect a decision to be made by the end of September if final agreements can be reached.

The financial agreements to secure ongoing business activities during the sale process remain in place and would conclude once an offer is made, Senvion said.

Senvion’s creditors unanimously approved Siemens Gamesa's exclusivity agreement at a committee on 11 September.

Continuing projects for turbine manufacturing secures a "majority of production jobs" for the next months, with some going into 2020, Senvion added.

The manufacturer is continuing to explore further options and negotiations with investors for the rest of its business, it added.

Siemens Gamesa will not be taking on any of Senvion’s debt, a Senvion spokesman confirmed.

"Today's announcement means that we are close to finding a safe harbour for a significant part of the business and substantial parts of its employee base," said Yves Rannou CEO of Senvion.

"In these difficult circumstances, this is positive news. Looking ahead to the weeks to come, the management team will continue to put all efforts behind finding the best solutions possible for the rest of the business," he added.

Senvion had been struggling to remain afloat after "operational mistakes" caused a severe cash flow crisis earlier this year.

The manufacturer’s creditor and lenders extended its insolvency loan at the end of July, giving the company more time to negotiate potential takeover deals.

It also gave full autonomy to its Indian business unit in August.

Senvion had received several advanced offers for various core parts of its business, it confirmed in August, but none for its entire turbine business unit.

A core element of any potential deal would cover Senvion's service assets in Europe.

Senvion has 60 service locations in Europe, including facilities in Portugal, France, the UK, Germany, Austria, Denmark, Poland, Italy, Belgium, and Sweden, according to its website.

It does not provide a capacity figure for how much it services in Europe, but a Senvion spokesman told Windpower Monthly the manufacturer likely services more than 10GW of its 14GW-plus European fleet.

By the end of Q3 2018 - the last quarter for which it has published results - Senvion recorded €80.5 million of revenue from servicing in Q3 2018 - up 18% year on year. It had a servicing order book worth €2.8 billion - an increase of 11% year on year.

More to follow...

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