Don´t be afraid to see what you see
Monday, 2 July 2012
The future of wind turbine maker Vestas hangs in the balance
The future of Danish Vestas, the world´s largest wind turbine manufacturer, hangs in the balance:
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.
And it is not only Vestas that is doing badly:
Vestas along with rivals General Electric Co. (GE) andSiemens 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.
"Banks are no longer willing to finance large projects constrained by their own financial issues while delays in grid connection and legal reasons in promising offshore wind markets inhibit growth, he said. “Also, the market is in overcapacity and there is price pressure from China.”
The crisis for wind turbine manufacturers should not come as a surprise to anybody. An industry which is totally dependent on government (tax payer) subsidies will never be successful in the long term.