Senvion has signed first service contract extensions after it gained some breathing space through a €100m loan deal with debtors two weeks ago, which it says is a reflection of customer confidence that the struggling Germany-based wind OEM can keep afloat.
The contracts are for services on three Italian wind farms by Libeccio and ERG Power Generation that have a combined capacity of 108MW. The extensions are for eight years in a 24MW Sicilian wind farm, and for five years in two wind farms with a joint capacity of 84MW in the Puglia region.
"We are delighted to confirm these contract extensions and wish to thank both Libeccio and ERG for their continued confidence in our services during these challenging times,” Senvion chief executive Yves Rannou said.
“The long-term, sustainable success of Senvion is contingent not only on our current transformation program, but also the delivery of excellent results through our trustful partnership with customers around the world. This has been a strong focus for us and will continue to be so."
Senvion on April 11 had filed for insolvency under self-administration – proceedings under German legislation similar to US Chapter 11 restructuring – after talks with lenders had failed.
A week later, the company’s main operative entity, Senvion GmbH signed a €100m binding loan agreement with its lenders and main bond holders likely to give the company breathing space to continue operations in coming months, while the manufacturer is trying to advance a restructuring started earlier this year.
Senvion has been loss-making from 2015 to 2017, and also during the first nine months of 2018. The company amid its crisis earlier this year had postponed the publication of 2018 full-year financial results.
The OEM has suffered from cut-throat competition in the global turbine market amid a transition to tender-based support regimes that reinforced steep price cuts, as well as a shrinking of the German home market that affects all wind turbine makers. Cash-strapped Senvion hasn’t been able to present larger onshore turbines yet in the 5MW class rival Western OEMs have already launched, nor offshore models in the 12MW-plus segment.
Market experts think Senvion may have to be sold (possibly to a Chinese buyer), or broken-up. The company’s service business is considered to be among the most valuable parts of Senvion.