Siemens Energy shares head for 2nd best day ever on hopes for guarantee deal

FRANKFURT (Reuters) -Shares in Siemens Energy were on track for their second-highest daily gain ever on hopes that a deal was within reach for around 15 billion euros ($16 billion) worth of project-related guarantees.

The stock price surge caps a recovery week for the maker of gas and wind turbines, shares of which fell to a record low on Oct. 26, when it disclosed talks with the government, banks and top shareholder Siemens over guarantees.

Since then, the stock has gained more than half and was up as much as 11.7% on Friday, making the group the top gainer among German blue-chips for a second straight day.

“A solution is expected soon, in which Siemens Energy would not need any fresh capital for now. The rise has been quite steady since the panic sell-off last week,” a local trader said.

Intensive talks between the parties continued throughout the week but produced no results, with sources saying that Siemens, which retains a direct 25.1% stake in Siemens Energy following a spin-off in 2020, still needed to come around.

Siemens Energy and Siemens both declined to comment.

German Economy Minister Robert Habeck on Friday tried to assuage fears that Siemens Energy was in need of liquidity, saying the group needed no cash but guarantees to cover performance bonds on future contracts.

“It is important to understand that this is not a political problem,” Habeck told Bloomberg TV, adding the case was different from Uniper and Lufthansa, which both had to be supported by Berlin during Europe’s energy crisis and the COVID-19 pandemic, respectively.

“They don’t need cash. They need a guarantee that they can … do the work,” Habeck said with regard to Siemens Energy’s record order book, adding the government was in talks with all parties involved.

($1 = 0.9394 euros)

(Reporting by Christoph Steitz, Zuzanna Szymanska and Alexander Huebner; Editing by Rachel More and Mark Potter)