Senvion said it is considering reorganisation options “in and out of court” as its shares plunged and Recharge was told the turbine OEM is in “critical” talks with lenders.
The manufacturer didn't immediately comment to Recharge on whether the reference to court processes means the company is considering starting insolvency proceedings. According to the Frankfurter Allgemeine Zeitung (FAZ) newspaper, courts get only involved in the financial crisis of a company once insolvency is an option.
Senvion’s shares fell by more than 30% in early trading in Germany as speculation over the turbine-maker’s short-term future continued. Its shares were trading for €0.82 soon after 1000 in Frankfurt, compared to a 52-week high of €11.88. They recovered some of the ground later in the day, but were still more than 20% lower in mid-afternoon trading.
Discussions with lenders have reached a critical stage, sources with knowledge of ongoing negotiations told Recharge.
An official statement from the Germany-based OEM issued on Monday said talks are continuing with “creditors and other financing sources, as well as its main shareholder [US investment group Centerbridge]”, as it attempts to raise finance.
“In connection with these discussions, the Senvion group is currently considering all available options, including in court and out of court reorganisation processes.”
Financial news agency Reuters said Senvion needs at least €100m of short-term financing to continue operations, citing two sources and mirroring reports in the German media such as FAZ.
Loss-making Senvion is racing to streamline and focus its operations under newly-installed CEO Yves Rannou, who said when he took over in February that “operational mistakes” made previously had left it in a weak position.
Senvion has struggled in recent years in a ferociously competitive wind turbine sector and a shift in market activity away from its heartland in Europe. It has also failed to make progress in the offshore wind sector and has seen its share price collapse since its initial public offering (IPO) in 2016.
On the upside, the company has stressed its progress in key emerging markets and a healthy order book as grounds for hope if it can implement its turnaround.
UPDATES with notion of a possible insolvency, more detail