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Denmark's Vestas Wind Systems A/S , the world's largest manufacturer of wind turbines, said it has terminated its former Chief Financial Officer's severance deal after it emerged he has cost the company up to 18 million euros from unauthorized deals in India.
The deals signed last year, which Vestas says were "in violation of the company's internal provisions" and its interests, have definitely lost the company €4 million and may have lost a further €14 million.
Vestas has announced it is terminating its severance agreement with former chief financial officer and deputy CEO Henrik Norremark, citing unauthorised deals costing the company "up to EUR 18 million". ..."[Norremark] seems to have entered into agreements in violation of the company's internal provisions regulating his power to bind the company as well as the company’s interests in general.
Vestas, the world's biggest wind turbine manufacturer, has decided to "scale down its sales efforts in the Indian market''. Vestas is currently implementing a global re-organisation plan to develop a "more scalable and flexible organisation" and cut cost by €250 million by the end of 2012.
Shares in Danish wind turbine maker Vestas (VWS.CO) plunged as much as 14 percent on Thursday as worries mounted that the company could ask shareholders for more capital, traders said.
"Vestas' stock has experienced wild swings over the past weeks as worries about the balance sheet and press reports about a potential strategic investor grabbed the headlines," Prozesky said. "Our view has been that the stock is largely ‘un- investable' given these two potential extreme outcomes."
Genneia wants to pay an outstanding balance in Argentine pesos, instead of euros or US dollars, as Vestas claims was agreed - a move that could leave the turbine group facing a heavy currency exchange loss on the more than $32m it says it is still owed.
A group of international banks have given Vestas Wind Systems a deadline of Jan. 1, 2013, to reach a strategic deal with Japanese industrial giant Mitsubishi Heavy Industries Ltd. seen as shoring up the troubled Danish wind turbine maker's finances, according to news reports.
The world's top wind turbine maker, Vestas of Denmark, announced on Wednesday that it would have to slash another 1,400 jobs by the end of the year in addition to the more than 2,300 positions already cut at the beginning of the year.
Vestas along with rivals General Electric Co. and Siemens AG is struggling with declining turbine prices and excess capacity as nations from the U.S. to Germany rein in support for renewable energy. The company detailed restructuring plans in January after issuing a second profit warning in three months.
Vestas' Chief Executive Ditlev Engel said the group had to get accustomed to no longer operating in a growth industry. He is under intense pressure to deliver a promised turnaround and restore investors' confidence, which analysts say will take time.
Danish wind turbine maker Vestas Wind Systems has dropped plans to build a factory in Britain after no orders were been signed for the turbines that were to be produced there, dealing a blow to the country's wind energy sector.
Vestas depends on the US for one-fifth of its orders, making it highly sensitive to US market conditions. Decades ago, California had tax breaks which became a boon for the Danish company. When those ended Vestas barely survived. The same sort of crisis could come this December, if Congress decides not to extend a production tax credit that underpins the US wind industry.
Anders Eldrup has unexpectedly resigned as chief executive of Denmark's Dong Energy, the world's leading offshore wind developer ...Earnings before interest, tax, depreciation and amortisation (Ebitda) were DKr300m lower in 2011 at DKr13.8bn.
Only those in complete self-denial would dispute that the wind power industry suffers from overcapacity, a legacy of the pre-crisis turbine construction boom when oil and gas prices were at near-record levels and few had yet appreciated the competitive challenge of shale gas. In the fat years, wind and solar power companies were tempted into extravagant investments that exploited their soaring equity prices.
"Electric cars are basically big batteries on wheels that have the virtue of being largely paid for by consumers and managed by companies like ours," Mr. Andersen said. "That's a hugely attractive proposition for utilities in countries like Denmark that need to find outlets for their renewable energy."
On the heels of its lackluster financial forecasts and revised financial earnings, Danish wind turbine giant Vestas has announced a massive wave of layoffs and a major corporate restructuring designed to protect the company from further damage.
"Investors are willing to see a new management on board because the current one has no more credibility," Desmaretz said. "Vestas struggled to deliver according to its plan and that is the main problem." The stock closed down 19 percent.
The company slipped into the red in the third quarter of 2011, posting a net loss of 60 million euros down from a profit of 187 million a year earlier. ..."Vestas has gone from being a business that earns money to suddenly posting a loss. Investors will have to address the fact that Vestas is not living up to expectations."
Vestas also said it would announce a "significant change" to its corporate structure on Jan. 12, though it ruled out tapping equity markets for cash. The shares have fallen almost 90 percent from their high in 2008 after a series of earnings misses including the latest announced on Oct. 30.