Understanding the Siemens Gamesa crisis and the collapse in Siemens Energy's share price - the difference in finance. Support and government guarantees

🌬️ Siemens Gamesa is a subsidiary of Siemens Energy. Siemens Gamesa Renewable Energy (SGRE) is a leading global provider of wind power solutions and was formed in 2017 through the merger of Gamesa Corporación Tecnológica and Siemens' wind energy division. Siemens Energy holds a significant stake in Siemens Gamesa and is responsible for the renewable energy business, particularly in the wind energy sector.

Siemens Garmesa Renewable Energy focuses on the environmentally friendly transformation of industry (decarbonization). It offers services in the field of renewable energies, including the manufacturing and upgrading of gas and wind turbine technologies, as well as the innovation of grid storage and digital grid technologies. Its main focus is on sustainable energy systems, electrification, automation, digitalization, and grid densification.

⚡ Siemens Energy AG is an energy sector company primarily engaged in the production and expansion of technologies for fossil and renewable energies as well as electricity grids.

Siemens Energy AG was originally part of Siemens AG. In September 2020, Siemens Energy was spun off from Siemens AG and listed on the stock exchange as an independent company. It is the business unit focused on energy technologies. Despite the spin-off, business relationships still exist between Siemens AG and Siemens Energy AG, but they are now two separate publicly listed companies.

The former parent company Siemens AG still holds 25.1% of the shares in Siemens Energy.

🏭 Siemens Energy and the role of its major shareholder Siemens AG: A dilemma

In the effort to rescue Siemens Energy from its difficult situation, attention is also focused on its main shareholder, Siemens AG. So far, however, the company is hesitant to issue guarantees, as Siemens AG actually intends to reduce its stake in Siemens Energy.

🎙️ Interview and Guarantees

Joe Kaeser, chairman of the supervisory board at Siemens Energy, made it clear in an interview with the weekly newspaper “Welt am Sonntag” that the company is not dependent on financial support from the state. Rather, the ongoing talks with the German government are focused on the granting of guarantees. These guarantees are intended to enable Siemens Energy to implement its ambitious growth plans.

🌬️ Challenges in the wind energy sector

This move is particularly interesting given the apparent difficulties in the wind energy segment of its subsidiary Gamesa. This impacts the parent company, Siemens Energy,'s ability to provide corresponding guarantees for future major projects. According to insider information, this could involve a sum of up to 15 billion euros.

🌍 Global Energy Industry

Siemens Energy is a major player in the global energy industry. The company operates in diverse sectors, from conventional energy sources like gas and coal to renewable energies such as wind and solar power. As the world increasingly shifts towards sustainable energy solutions, Siemens Energy's growth plans are of enormous importance, both for the company itself and for the global energy transition.

🔒 Additional safeguards and hurdles

The guarantees being discussed with the federal government would offer the company additional security. They could serve as leverage for accessing financing for major projects without relying on direct government subsidies. However, several hurdles must be overcome, including regulatory approvals and potential concerns from shareholders and the public.

🔄 Current situation at Gamesa

Gamesa's current difficulties provide valuable context for this discussion. Gamesa specializes in the manufacture of wind turbines and has historically achieved strong financial results. However, recent problems, perhaps stemming from supply chain bottlenecks or technological challenges, have limited the company's ability to succeed in this segment. This could be one of the main reasons Siemens Energy is seeking support in the form of guarantees.

💰 Guarantees from Siemens Energy

In light of this, the volume of the promised guarantees – up to €15 billion – is particularly noteworthy. It reflects the high level of confidence that both the company and the German government have in the long-term potential of Siemens Energy. For the German government, this could be a strategy to accelerate the transition to renewable energies in Germany while simultaneously strengthening the country's industrial base.

⚠️ Risks of Guarantees

Guarantees of this magnitude are not without risk. Should Siemens Energy fail to meet expectations, the financial risk to the state would be enormous. Therefore, these negotiations must be conducted with great care and consideration. A thorough examination of Siemens Energy's business models and future projects is essential to accurately assess the extent of the risk. Furthermore, mechanisms must be implemented to protect the state from potential losses should the guarantees need to be invoked.

📢 The importance of transparent communication

Transparent communication with shareholders and the public is equally crucial. With such large sums of money and the associated public attention, justifying the guarantees to the general public is essential. Only in this way can trust in the measures and in the company itself be maintained in the long term.

🌟 Future of Siemens Energy

Siemens Energy faces a complex but also promising future. The sought-after guarantees could lead the company into a new phase of expansion and innovation, while simultaneously paving the way for a more sustainable global energy supply.

📣 Similar topics

• 🌍 Siemens Energy and the global energy transition
• 💡 Siemens Energy's growth plans in action
• 🌬️ Gamesa's challenges in the wind energy segment
• 💶 Government guarantees: Up to 15 billion euros for Siemens Energy?
• 🛠️ Siemens Energy: Between Expansion and Innovation
• 🔄 Accelerating Germany's transition to renewable energies
• ⚖️ Risks and rewards: The warranty debate
• 🤝 Trust and transparency: Siemens Energy's communication
• 🌟 Future prospects of Siemens Energy
• 🔍 A thorough examination of the guarantees: Security for the state

#️⃣ Hashtags: #SiemensEnergy #EnergyTransition #Gamesa #GovernmentGuarantees #RenewableEnergies

🌐 Understanding the Siemens Gamesa crisis and the Siemens Energy share price collapse

In the context of the economy, and especially for large companies like Siemens Energy, government financial support and guarantees are two different instruments that the federal government can use to support companies in times of economic difficulty.

💰 Government financial support

Government financial support refers to direct financial resources transferred by the government to a company to ensure its liquidity during times of crisis or to promote specific projects deemed economically or socially beneficial. This support can take the form of direct grants, low-interest loans, or tax breaks.

🔍 Siemens Gamesa and financial support

In the case of Siemens Gamesa, such financial support could be used to promote research and development in the field of renewable energies or to secure jobs in regions where the company is of significant economic importance. These direct financial contributions would enable the company to make investments it might not have made under normal market conditions or to overcome financial bottlenecks caused by external factors.

🛡️ Granting of guarantees by the Federal Government

In contrast, guarantees are not direct financial contributions. A guarantee is a contractual obligation by the government to third parties (e.g., banks) to step in if the beneficiary company defaults. In other words, if Siemens Gamesa, for example, takes out a loan from a bank and the federal government provides a guarantee, this means that the federal government assumes the debt if Siemens Gamesa cannot repay the loan.

🔑 Key differences in the context of Siemens Gamesa

While both instruments aim to support businesses during economically challenging times, they differ in their nature and impact. Direct financial support provides an immediate boost in liquidity, while a guarantee allows the company access to external financing on more favorable terms.

🔎 Analysis of Siemens Gamesa

In the current case of Siemens Gamesa, it would be necessary to examine precisely what form of support the company received and for what reason. It is also important to note that both direct financial support and guarantees are generally subject to certain conditions designed to ensure that the funds are used in accordance with the government's policy objectives.

📣 Similar topics

• 1️⃣ Government support in times of crisis: What companies need to know 🏦
• 2️⃣ Siemens Gamesa and the German Federal Government: A case study of financial assistance 🌿
• 3️⃣ Financial resources vs. guarantees: Which support is right for your business? 💼
• 4️⃣ Tax breaks as an instrument for economic development 📉
• 5️⃣ How guarantees can reduce credit risk 🛡️
• 6️⃣ Funding programs from the German Federal Government: Direct grants and low-interest loans 🎯
• 7️⃣ Research and development in renewable energies: A funding case for Siemens Gamesa 🌞
• 8️⃣ Political conditions: How government aid is awarded to companies 📜
• 9️⃣ Impact of government aid on the overall economy 📊
• 🔟 Liquidity in times of crisis: How companies can benefit from government measures 💰

#️⃣ Hashtags: #GovernmentSupport #SiemensGamesa #FinancialResources #Guarantees #EconomicCrisis

Facts, figures, background information: Siemens Gamesa Renewable Energy – Image: Rumagia Bangun Setiawan|Shutterstock.com

More about it here:

• Siemens Gamesa Renewable Energy (SGRE) – Company Overview

Siemens Energy in negotiations with the German Federal Government regarding state guarantees – Image: Tobias Arhelger|Shutterstock.com

Siemens Energy faced significant financial challenges in the third quarter. The net loss amounted to almost €3 billion, primarily due to problems at its Spanish wind energy subsidiary, Gamesa. These developments have led the company to expect a substantial overall loss of approximately €4.5 billion for the current fiscal year. Gamesa alone contributes around €4.3 billion to this loss. These figures illustrate the serious financial situation of Siemens Energy. We have reported on this previously.

More about it here:

• Siemens Energy is in negotiations with the German Federal Government

A key component in understanding the Siemens Energy share price collapse is the analysis of current market trends and developments in the energy sector. Changes in the demand for renewable energies, political decisions, and global developments can significantly impact the share prices of companies in this sector.

📝 Corporate strategy and performance

It is crucial to examine Siemens Energy's strategy and performance over the past few quarters. Have they successfully invested in new technologies? Have they responded efficiently to changing market conditions? The company's financial health and operational efficiency play a decisive role.

🔍 Competitive analysis

A comparison with other companies in the industry can provide valuable insights. How have the shares of other energy companies performed? Are there specific factors that differentiate Siemens Energy from the competition?

⚖️ Regulatory influences

Changes in the regulatory landscape can have a significant impact on companies in the energy sector. New laws, environmental regulations, or subsidy programs can affect profitability and competitiveness.

🌍 Global events and uncertainties

Global events such as geopolitical tensions, economic uncertainties, or natural disasters can significantly impact stock markets. It is important to examine whether such external factors may have contributed to the recent price decline.

🛡️ Investment strategies and risk management

It is important to emphasize that the stock market is inherently volatile, and price drops are not uncommon. Investors should always consider broad diversification in their portfolio to protect themselves against such risks.

📰 Latest news and company announcements

It is also advisable to pay attention to the latest news and developments relating to Siemens Energy, as information and announcements from the company itself can have a significant impact on the share price.

🔮 Complex topic

The decline in Siemens Energy's share price is a complex issue influenced by various factors. A thorough analysis of these aspects can help provide a comprehensive picture of the situation and assist investors in making informed decisions. It remains to be seen how Siemens Energy's shares will perform in the coming months and whether the company will take measures to mitigate the decline.

📣 Similar topics

• 📈 Market trends and industry development: Analysis of the energy sector
• 💼 Siemens Energy's corporate strategy and performance
• 🔍 Competitive analysis in the energy sector
• 📜 Regulatory influences on Siemens Energy
• 🌍 Global events and their impact on stock markets
• 💰 Understanding volatility in the stock market
• 📰 Latest news about Siemens Energy
• 🧐 Reasons for the Siemens Energy share price collapse
• 📊 Financial health of Siemens Energy
• 🔄 Investment strategies for risk reduction

#️⃣ Hashtags:
#MarketTrends #CorporateStrategy #CompetitiveAnalysis #Regulation #GlobalEvents #StockMarket #SiemensEnergy #Finance #Investments #RiskReduction

Siemens Gamesa Renewable Energy – Facts and Figures – Background Information – Image: Xpert.Digital

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