Germany hands struggling wind turbine maker Enercon more than $500m in 'liquidity aid'
Embattled OEM to receive loans from European country's Economic Stabilisation Fund to cushion impact of cost inflation and supply chain bottlenecks
Enercon will receive €500m ($511m) in state aid to cushion negative effects of the Covid-19 pandemic on the embattled German wind turbine manufacturer.
The funds will be channelled as loans via Germany’s economic stabilisation fund (WSF) that has already helped struggling companies in other sectors in the European country, including aviation (Lufthansa) and tourism (Tui).
Enercon claimed it is nevertheless working on a solid financial basis and striving for balanced financial results this year amid an economic consolidation and a “very good” equity base.
“However, the Covid-19 pandemic has led to significant disruptions in global supply chains, unexpected additional costs for materials, components, transport & logistics and, as a result, to delays in important projects,” the company said.
“The situation has not yet returned to normal and against the background of a renewed increase in the number of infections in China, a further increase in Coronavirus-related supply chain risks can be expected.”
The OEM added it so far been able to meet all of the challenges on its own, but has made considerable efforts and deployed reserves.
“In order to minimise liquidity risks, the management decided to use a state credit line via the WSF.”
The facility was drafted to stabilise the German economy in the wake of the pandemic by strengthening capital bases to overcome liquidity bottlenecks. It is being provided to businesses whose demise would have significant impacts on employment and on Germany as a business location.