In May, we covered a story about several companies and investment funds eyeing stake in financially-troubled German turbine manufacturer Senvion, and a major update on this matter has now emerged.
Senvion recently reported that it entered an agreement with Siemens Gamesa to discuss the sale of some assets. The agreement is part of insolvency plans agreed upon by Senvion with its creditors. The company is reportedly looking to sell some wind energy projects to Siemens Gamesa, which would be an attractive venture for the latter.
In May, media reports pointed to Toshiba and investment firm Blackstone as the other possible suitors for Senvion. The turbine manufacturer has changed hands a number of times in the last decade or so. It was the target of an ill-timed acquisition by India’s largest wind energy company, Suzlon Energy, in 2007.
In early 2015, Suzlon Energy sold Senvion at a loss to US-based investment firm Centerbridge Partners. In 2016 Senvion looked to enter emerging markets to diversify it Europe-centric portfolio and acquired a small turbine manufacturer in India. This move, too, seems to have backfired for the company.
The Indian wind energy sector is now a highly regularized market with capacity addition linked to tenders issued by the government agencies. Increased competition from local (Inox Wind and Suzlon Energy) and foreign companies (GE and Siemens Gamesa) further squeezed any prospects of a satisfactory growth in revenue and operations for Senvion.
Like several companies, Senvion seems to have fallen prey to the global shift from feed-in tariffs to increased competition under the auction regime. In this cut-throat competitive market scenario only those have managed to survive and thrive that have embraced consolidation. Unfortunately for Senvion, the company has reached this stage by necessity rather than desire.
Interestingly, Senvion’s former owner Suzlon Energy is in even deeper financial trouble. Suzlon Energy itself is looking for buyers for some of its assets. According to media reports, it has had acquisition talks broken down twice with Vestas. The company is struggling to service is debt worth millions of dollars and had already defaulted on interest payments.
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