By Sally Bakewell, Bloomberg
Vestas Wind Systems A/S (VWS) fell the most in four weeks after a report that the turbine maker is in talks with two banks about restructuring debts after drawing a 300 million-euro ($379 million) credit line. The shares tumbled 8.1 percent in Copenhagen after the Sunday Times reported that Royal Bank of Scotland Group Plc and HSBC Holdings Plc (HSBA) demanded Vestas submit a comprehensive financial plan from Vestas. The British newspaper said Vestas hired PwC and the banks appointed Ernst & Young LLP to advise on the plan.
Vestas along with rivals General Electric Co. (GE) and Siemens AG (SIE) is struggling with declining turbine prices and excess capacity as nations from the U.S. to Germany rein in support for renewable energy. The company detailed restructuring plans in January after issuing a second profit warning in three months. It shelved a U.K. offshore-turbine factory venture and closed a plant in China to save cash last month.
“The company is clearly in severe distress,” Martin Prozesky, an analyst at Sanford C. Bernstein & Co., said. “The restructuring they’ve announced so far is very insufficient relative to the challenges they are facing. Unless they restructure much more radically, they could run into a liquidity problem,” he said today by phone. Read article