Despite liquidity shortages,
Siemens Financial Services (SFS) will use the Siemens balance sheet
to offer more project finance to its customers, Joe Kaeser,
Siemens’ chief financial officer, has announced.
Kaeser said that looking forward, the
company would increasingly act as a bank for its customers and use
its financial services unit and the Siemens balance sheet to offer
project finance to its customers.
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Kaeser also announced that SFS had
expanded its balance sheet by €2 billion to €11 billion in the last
fiscal year.
In FY2008, SFS’s Project & Export
Financing division provided equity in infrastructure projects
totalling €27.4 billion (€7.2 billion in Europe, €4.8 billion in
Asia Pacific, €5.3 billion in the Americas, and €10.1 billion in
Africa, CIS and the Middle East).
Kaeser’s comments are believed to
indicate that the company will expand its lucrative project finance
business in the new year.
Specifically, the division focuses on
projects in the power, medical and infrastructure sectors. For
example, in May this year, SFS opened the €460 million Bangalore
Airport, in which it holds a 40 percent stake.
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By GlobalDataDespite seeing declines in the second
half of 2007, SFS grew its balance sheet by 30 percent in the six
months to October. The company attributed this to its anti-cyclical
investment strategy, which means it “can operate detached from the
typical cycles in the banking industry”.
According to Kaeser, despite the
credit crunch hitting companies globally, Siemens is “attempting to
shore up struggling customers by extending financing to those
affected”.
SFS has already raised nearly €6
billion in medium- to long-term debt capital on the bond market in
the past 12 months.
It is also borrowing from its parent,
which has just secured new credit lines of €8 billion until
2012.
The company is further helped by
having obtained banking licences in the countries in which it
operates, including France and the UK.
Although these are sometimes a legal
requirement for offering commercial finance, they are now proving
helpful to move money between countries and between Siemens
businesses.
In a separate interview, Peter
Löscher, Siemens’ CEO, told the German magazine Euro am Sontag that
although the company’s growth was mainly organic, he would not rule
out small acquisitions, either.
This comes at a time when further
speculation mounts that SFS could acquire CIT’s vendor finance
business, as reported by Leasing Life (see Leasing Life November
issue).
