Siemens Energy Has Trouble Selling Off Turbine Business in Russia, Reports Say

MOSCOW (Sputnik) - Siemens Energy might not be able to sell its turbine business to Russian company Inter RAO as its local subsidiaries, Siemens Gas Turbine Technologies (SGTT) and Siemens Energetika, fall under a recent law banning sale of shares to investors from unfriendly countries, newspaper Kommersant reported Friday, citing sources.

Siemens Energy's two subsidiaries in Russia were put on the ban list tentatively, according to the report.

Negotiations between Siemens and Inter RAO were conducted even before the publication of the decree, and the parties were planning to sign an agreement in the coming weeks, according to the newspaper. Although Inter RAO has already submitted a request to the government to exclude SGTT from the list of companies subject to the ban, there is a possibility that the deal will be frozen.

Siemens Energy announced in its third quarter financial report on August 8 that it had started the restructuring of its business activities in Russia, which are expected to be completed by the end of 2022. In the third quarter, Siemens' losses from the gas and electricity segment amounted to 200 million euros ($199.5 million).

The Nord Stream gas pipeline in the German town of Lubmin.

© Sputnik / Grigory Sysoev

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Russian President Vladimir Putin signed a decree on August 5 that specifically bans the sale of foreign shares in strategic Russian companies, primarily in the energy sector, unless authorized by the Russian government.

SGTT is a joint venture between Siemens AG which owns 65% and Russian energy equipment manufacturer Power Machines that owns 35%. SGTT produces, sells and does maintenance service of gas turbines with a capacity above 60 megawatt for the Russian and CIS markets. According to the company, the localization level of the 2000E gas turbine, one of the most popular in the Russian market, reaches 52%.