Vestas cuts more jobs, looks to sell 20% stake

Posted: Thursday, November 8, 2012

Danish wind turbine manufacturer Vestas Wind Systems A/S said it hopes to auction as much as 20 percent of a stake in the company, and it plans to cut its staff by 3,000 people over two years.

Chief Financial Officer Dag Andresen said the company’s leaders hope an investor will help keep the company afloat amid decreasing turbine prices.

“What’s important is that we have investors who understand the company, the segment that we are working in and also have a longer-term view,” Andresen said. He would not comment about a possible partnership with Mitsubishi Heavy Industries Ltd.

Last year, Vestas reported its first loss since 2005, amid a flood of products on the market. It has scrambled to get back into the black ever since. This summer, the company’s stock surged after lenders decided to waive loan covenants and news of the Mitsubishi talks surfaced.

Even so, this year Vestas does not anticipate a positive free cash flow. Currently, it expects up to €500 million in cash losses.

The U.S. government provides a 2.2-cent-per-kilowatt-hour incentive for wind power production. Elected for a second term yesterday, President Obama has indicated he supports extending the credit.

“We hope that what the president has said will materialize,” CEO Ditlev Engel said. “Our hope is that it will happen” (Alex Morales, Bloomberg, Nov. 7).