Downer sees USD-31m loss on Aussie wind project with bankrupt Senvion

Downer EDI Limited (ASX:DOW) on Thursday warned that the insolvency proceedings of Germany’s Senvion SE (ETR:SEN), its partner in the 429-MW Murra Warra wind project in Victoria, will have a negative impact on its 2018/19 fiscal year performance.

According to the Australian firm, Senvion’s bankruptcy will hurt it with pre-tax losses of AUD 45 million (USD 30.8m/EUR 27.9m) that will be booked for the full year ended June 30, 2019. Those losses are related to the cost for completing the project and construction contingencies, performance and liquidated damages. Previously, the Australian construction group guided for a consolidated net profit of AUD 352 million for fiscal 2018/19, not including the Senvion impact.

Downer and Senvion share liability under the wind project as construction partners and are responsible for the installation of 61 turbines at the site. Following the announcement in April that debt-laden Senvion’s main unit Senvion GmbH had filed for self-administration proceedings, Downer started talks with all shareholders of the Murra Warra scheme, seeking to establish a process for securing delivery of outstanding equipment and completing the project.

In a project update, Downer said it has completed balance of plant works on time and on budget and 36 of the wind park’s 61 turbines have been installed, with 13 of them already producing power. Downer and Senvion have reached an agreement that calls for the wind turbine maker to assist it in the commissioning of the wind farm.

(AUD 1.0 = USD 0.685/EUR 0.620)

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