Troubled German wind turbine group Siemens Energy is considering selling a significant portion of its 24% stake in a listed Indian subsidiary to former parent Siemens AG to strengthen its balance sheet.

The wind turbine group may announce the divestment of shares in Mumbai-listed Siemens Ltd. as early as this week, people familiar with the matter said, according to Bloomberg News.

The shares, of which Siemens already owns 51%, are currently worth EUR 3.3bn.

At the same time, Siemens AG is under pressure from the German government to provide loan guarantees that are crucial for Siemens Energy to take on future large projects.

The guarantees provided by Siemens could cover several billion euros for future projects, according to the sources, if the Munich-based tech giant agrees to a deal despite its previously announced intention to reduce ties with the troubled division that was spun off three years ago.

The government is ready in principle to commit up to EUR 8bn in guarantees, but expects Siemens and banks to cover the rest, according to the sources.

Siemens Energy shares plunged 35.5% on Thursday last week after the company announced that it is in talks with both the German government and several banks about guarantee schemes.

(Translated using DeepL with additional editing by Mads Oddershede)