As part of its ongoing turnaround plan, wind turbine maker Vestas is selling six of its factories for EUR 1, or $1.35.
Under the deal, which is subject to customary closing conditions, German industrial group VTC Partners GmbH will acquire two of Vestas' machining units and four of its casting units. The plants are located in Norway, Sweden, Germany, China and Denmark, and about 1,000 Vestas employees at the facilities will be transferred to VTC.
The transaction includes a supply agreement between the two companies, and Vestas expects outsourcing the casted components will save it around EUR 30 million over the next two years.
‘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," says Jean-Marc Lechene, executive vice president and chief financial officer of Vestas.
According to the company, the transaction has been agreed at a sales price of EUR 1 plus an earn-out element for Vestas of up to EUR 25 million. The company says the divestment price implies a further write-down of approximately EUR 50 million consisting of about EUR 20 million in assets held for sale and around EUR 30 million in net current assets, which will be included in special items in the third quarter of this year.
The sale of Vestas' six units comes after the company recently announced plans to close a nacelle factory in Italy, cutting 120 jobs. The company has said that its ongoing turnaround plan, announced in January 2012, is an effort to keep Vestas competitive and return to profitability.