BERLIN (Reuters) – The German government on Tuesday said it had decided to backstop Siemens Energy with guarantees worth 7.5 billion euros ($8.12 billion) as part of a deal with other stakeholders to help the company fulfill its orderbook.
The guarantees are part of a package totalling 15 billion euros agreed with private banks and other stakeholders and would also impose a pause on dividends and higher level bonuses, the economy ministry said in a statement.
Private banks were expected to provide Siemens Energy with guarantees worth 12 billion euros while Siemens Energy would seek another 3 billion from other sources, the statement said, adding it was conditional on the final sign-off of all parties.
“In the past few weeks, the federal government has been in intensive contact with Siemens Energy, Siemens AG, Siemens Energy’s largest shareholder, and private banks,” the statement said.
Reuters first reported last week that all stakeholders had reached an agreement in principle to cover the guarantees, helping the group’s shares to recover after news of the discussions pushed the stock to a record low last month.
($1 = 0.9240 euros)
(Reporting by Christian Kraemer; Writing by Madeline Chambers and Matthias Williams, editing by Kirsti Knolle)