Vestas CFO says Mitsubishi talks focused on 8-MW offshore turbine - report

Nov 28, 2012 - The talks between Denmark's Vestas Wind Systems A/S (CPH:VWS) and Japan's Mitsubishi Heavy Industries (TYO:7011) are centred around the development of an 8-MW offshore wind turbine, Vestas's CFO, Dag Andresen, said.

However, it is still too early to say when the discussions could be completed, Andresen was quoted as saying by news agency Bloomberg on Tuesday. An 8-MW turbine would be 30% more powerful than the biggest machine available currently.

Vestas unveiled in August talks with Mitsubishi regarding a potential strategic partnership but no details had been disclosed until now. However, market talks have indicated that the cooperation could be in the form of a joint venture and that is why the talks are taking so long.

On Monday, the Danish company said it had negotiated a syndicated loan of EUR 900 million (USD 1.163bn) from its lender group of nine international banks, to replace the current credit facility of EUR 1.3 billion. In addition, it has agreed on revised term loans on an amortising basis of EUR 200 million and EUR 55 million with the European Investment Bank (EIB) and the Nordic Investment Bank (NIB), respectively.

According to DNB Markets analyst Haakon Levy, cited by Bloomberg, the revised credit deal puts Vestas into a better position to negotiate with Mitsubishi. The analyst also said that a joint venture between the two companies "would make sense".

Janne Vincent Kjaer, analyst at Jyske Bank, estimates that after the new bank deal Vestas has a "slightly improved" negotiating power, as its financial flexibility has not increased but the short-term default risk has been removed.

(EUR 1.0 = USD 1.293)

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