Bankers assemble €7 billion debt package for Siemens Energy unit sale

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Summary · why it matters

Bankers are assembling debt packages of up to €7 billion, or $7.9 billion, to finance a potential majority stake sale in Siemens Energy AG's steam turbines unit, Bloomberg reported Friday, citing people familiar with the matter. The financing efforts follow the German energy group's announcement in August that it plans to separate the division, which manufactures steam turbines and compressors primarily for industrial clients. Private equity firms including CVC Capital Partners, EQT AB, and Bain Capital are among the buyout groups evaluating bids for the business, and the unit, officially known as the Transformation of Industry division, could command a total valuation exceeding €10 billion as Siemens Energy sharpens its focus on core power generation and transmission assets. Lenders are pitching debt packages designed to support the transaction through a mix of drawn and undrawn credit facilities, with the proposed structures reportedly featuring €4.5 billion to €5 billion in drawn debt, including leveraged loans and high-yield bonds, alongside significant undrawn capacity. To accommodate the unit's operational requirements, bankers are structuring approximately €2.5 billion in undrawn facilities, comprising a €1 billion revolving credit facility and €1.5 billion in guarantee lines, and based on the division's estimated annual earnings of around €900 million, the proposed debt structure would represent a leverage ratio of approximately 5.0 times EBITDA.

Impact on assets 3

Energy Transition & Power Demand▲
Siemens Energy AG
ENR
▲ PositiveCapitalrelevance

Bankers assembling up to €7B debt package to finance a majority stake sale of Siemens Energy's steam turbines unit, sharpening focus on core power assets.

Financials▲
CVC Capital Partners PLC
CVC
▲ PositiveCapitalrelevance

CVC Capital Partners is among the private equity firms evaluating bids for Siemens Energy's Transformation of Industry division.

Off-coverage companies 1

Bain Capitali
Private▲ PositiveCapitalrelevance

Bain Capital is among the buyout groups evaluating bids for Siemens Energy's steam turbines unit.