Vestas Wind Systems A/S sold six turbine factories to VTC Partners GmbH for 1 euro ($1.35) to complete a program of asset disposals under the unprofitable Danish manufacturer’s two-year turnaround plan.
The company will book a writedown of about 50 million euros on the sale when it reports third-quarter earnings, Aarhus-based Vestas said today in an e-mailed statement. The plants are in Norway, Sweden, Germany, China and Denmark.
Vestas is trying to stem two years of losses by lowering fixed costs by 400 million euros and cutting staff 30 percent to 16,000 in a turnaround due to continue through to the end of this year. The sale of four foundries and two machining units, which refine cast metal products into finished components, means Vestas will no longer have assets for sale on its balance sheet.
“The divestment of our machining and casting units is part of the plan to improve our capacity utilization and to become a more asset-light and scalable company,” Chief Operating Officer Jean-Marc Lechene said. “It was important to take the time to find the right partner in order for both parties to benefit.”
Vestas declined by as much as 6.3 percent and was down 2.6 percent at 144 kroner as of 11:43 a.m. in Copenhagen trading. The stock has risen more than fourfold in value this year.
About 1,000 staff at the plants will move to VTC after the sale, which comes a week after Vestas said it planned to shut its nacelle plant in Taranto, Italy, affecting 120 workers.
The company employed 17,253 at the end of the second half, and said in August it would no longer sell its tower factory in Pueblo, Colorado, as it expect full utilization next year.
Vestas will be entitled to as much as 25 million euros of earnings from the plants sold, depending on their performance, according to the company. It signed a sales-and-supply deal with Munich-based VTC and said it expects the sale to lower its costs for cast components by about 30 million euros over two years.
The deal is subject to approvals from China, Vestas said.
“This transaction offers compelling advantages for both parties involved and VTC plans to invest significantly in the strategic realignment of the group,” VTC Managing Director Thomas Robl said in the statement. VTC owns the Silbitz Group, a metal-casting business based in Germany, the company said.