Sunday, October 2

Siemens Gamesa’s wind developments attract more than twenty investors

The sale of the wind farms of Siemens Gamesa. As reported by financial sources to ‘El Periódico de España’, Last week the company received almost a score of non-binding offers to buy these renewable assets under development, that are divided into 70 projects totaling around 3,000 MW and are distributed between Spain, France, Italy and Greece. Interested parties include large traditional energy companies, National and international; venture capital funds and investors specialized in infrastructure.

The same sources indicate companies such as Iberdrola, Naturgy, Repsol or Orsted Energy and funds such as Blackstone, CPPIB, F2i or Hermes, among others. According to the same sources, at the end of next January the offers will be received with the idea of ​​choosing the winner during the first quarter of next 2022. The same sources indicate that The process is one of the most competitive in recent months as it is one of the last large platforms for renewable assets under development in Spain that remain to be sold..

These wind developments are in valued at around 300 million euros, although the price could rise to an amount greater than 500 million due to the interest that these promotions have aroused. In late summer Siemens Gamesa hired the American Bank of America (BofA) to orchestrate a competitive process to divest these green assets and thus focus on its core business, the manufacturing of wind turbines for the renewable industry. Legal advice is in the hands of the firm CMS Albiñana & Suárez de Lezo.

Strategic review

It should be remembered that In August 2020, the CEO of Siemens Gamesa, Andreas Nauen, announced to investors and analysts that they had started a strategic review of your business in order to rotate different assets in order to obtain sufficient liquidity to keep its activity afloat, which has been severely impacted by the advance of the coronavirus pandemic. Specifically, last year it lost 900 million euros as the virus slowed the development of an important order book that was underway, driven by the heat of the energy transition in the Old Continent.

However, Siemens Gamesa was confident of recovering the pre-pandemic figures throughout 2021 and returning to profits, but has registered red numbers of 672 million. Despite the 32% reduction compared to the losses of the previous year, increased supply costs and less receipt of orders for wind turbines (17.3% less, around 2,500 million less) have weighed down the group’s accounts, which is why it has decided to focus exclusively on the manufacture of wind turbines and obtain liquidity from the sale of wind power developments.

In fact, the group wants to focus especially on the world of offshore wind power due to the great growth prospects expected in the face of the slowdown in onshore wind power, in which factories in the Basque Country are specialized , Navarra and Castilla y León. This operation comes amid rumors in the market in which a possible takeover bid by the group’s parent company, the German Siemens Energy, for the former Gamesa is discussed.

The Spanish company merged with the German wind power business in June 2016, creating a world leader with revenues of 9.3 billion at that time and an order book valued at 20 billion euros. Now, its portfolio amounts to 32,542 million and has sales of 10,198 million. In any case, the company’s shares show a drop of 56.4% compared to a year ago, trading at 20.91 euros per share at the close of the trading day yesterday.

Transaction surge

The moment to take out this portfolio of renewable developments is not accidental, as Interest in this type of asset has skyrocketed as the decarbonization of the economy has gained importance globally as this global energy transition accelerated as a result of the arrival of the coronavirus. Also, during the pandemic, these types of assets have shown their resilience compared to other traditional sectors more impacted as it is protected by public policies that favor its development.

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In this context, the number of investors interested in the renewable energy business is growing more and more, seeking assets that offer good returns in counter-cyclical sectors. Thus, it is more and more often find a wide variety of investors in these competitive auctions, ranging from venture capital funds specialized in renewables or infrastructures to insurance companies through traditional energy companies that are having to rapidly transform their businesses.

The developers of this type of assets are being greatly benefited by this appetite triggered by the renewable world, since they manage not only to make a profit or make money with the sale of green projects, but also on many occasions they find a partner who helps them professionalize the business or offers them financing to be able to start these projects, which often require heavy investments.

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