Vestas CFO says new bank deal not linked to talks with Mitsubishi - report

Nov 27, 2012 - The revised debt agreement between Vestas Wind Systems A/S (CPH:VWS) and its banks is not linked with the ongoing talks about a potential cooperation with Mitsubishi Heavy Industries (TYO:7011), according to Vestas's CFO.

These are two separate matters and there is absolutely no connection between the two, Dag Andresen, chief financial officer of the Danish wind turbine maker, told on Monday Danish newswire Ritzau Finans.

Vestas unveiled in August talks with Mitsubishi regarding a potential strategic partnership but no details have been disclosed since then.

Yesterday, the Danish company said it had negotiated a syndicated loan of EUR 900 million (USD 1.165bn) 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.

The reduced debt facilities reflect Vestas's plan to downsize its capacity and workforce amid declining order intake, and the company's new operational model, Andresen said. The combination of these two measures will reduce the need of capital. In addition, the CFO underlined that the current global conditions differ a lot from those when the loan agreements were originally signed. For example, back then Vestas expected to have a production of up to 10 MW, while now an output of 5 GW is projected for 2013, Andresen said.

(EUR 1.0 = USD 1.295)

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