Siemens Energy shares rise; HSBC sees `relief potential`
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Shares in Siemens Energy rose to the top of Frankfurt's blue-chip index on Thursday after brokerage HSBC said a possible sale of the group's stake in India's Siemens Ltd could alleviate balance sheet concerns.
The company's stock was up 7% at 0857 GMT, extending its recovery after the group's disclosure of talks with the German government, banks and top shareholder Siemens around project guarantees caused shares to hit a record low last week.
People familiar with the matter said earlier this week that Siemens Energy was weighing a sale of most of its 24% stake in Siemens Ltd to Siemens AG as one way to strengthen its balance.
"If confirmed, the sale should dispel fears of a dilutive capital increase for Siemens Energy and, in our view, underlines the hidden value in Siemens Energy's portfolio," HSBC analysts wrote, keeping a "buy" rating on the stock.
Siemens Energy's stake in Siemens Ltd is worth 283.2 billion Indian rupees ($3.4 billion), and a sale would provide "relief potential" for the group's stock.
According to HSBC, a purchase by Siemens AG would be an "elegant, albeit expensive, solution" for the German firm, which is under pressure from Berlin to help with providing some of the 15 billion euros in guarantees for Siemens Energy.
"Siemens AG already owns 51% of Siemens India, so could buy most of Siemens Energy's stake and remain below the 75% threshold to avoid a mandatory takeover bid for Siemens India," HSBC said.
Siemens AG spun off Siemens Energy in 2020 and retains a 25.1% stake in the group.
