According to two individuals acquainted with the situation, Siemens Energy (ENR1n.DE) is thinking of selling a portion of its 24% ownership in Siemens Ltd. (SIEM.NS), an Indian company listed, to its former parent, Siemens AG (SIEGn.DE), to strengthen its financial sheet.
A partial sale would be a swift method for the German manufacturer of gas and wind turbines to fortify its financial base. At the same time, negotiations with Berlin and Siemens on performance bond guarantees continue. The stake is presently valued at around $3.4 billion.
At 0512 GMT, Siemens Ltd.’s shares had dropped by almost 4% on the announcement, to their lowest point in over six months.
Both Siemens AG and Siemens Energy chose not to comment. According to one of the sources, Siemens AG currently owns 51% of Siemens Ltd.; increasing its ownership would be a strategic decision the company could more readily defend to its shareholders than providing assurances to Siemens Energy.
The individual stated that there is no assurance that a deal will be made and that the discussions are one of the possibilities being considered.
Citing sources familiar with the subject, Bloomberg, which broke the initial story on the potential stake sale, stated that Siemens Energy may declare the sale of its shares in Siemens Ltd. as early as this week.
The announcement of the possible sale coincides with discussions Siemens Energy is having with the German government, banks, and Siemens to get guarantees worth 15 billion euros to support large-scale industrial projects.
Following the company’s disclosure of the discussions, Siemens Energy’s stock fell to a record low last week. In hopes that the negotiations would be fruitful, the shares finished 12.7% higher on Monday.
In the wake of a recent agreement to sell its Trench high-voltage component division to Triton, sources told Reuters on Sunday that Siemens Energy was considering steps to strengthen its financial sheet, including more asset sales.
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