* Vestas agrees loan facility with banks
* Says facility eliminates need for equity issue
* Says in position to reduce debt in future
* Shares jump 17.5 pct
(Adds details, background, CFO, analyst comments, updates share
By Mette Fraende
COPENHAGEN, Nov 26 Danish wind turbine maker
Vestas has agreed a 900- million-euro ($1.2 billion)
loan with its banks, ending speculation it might need to issue
shares and winning it more time to adjust to plunging demand.
The wind power sector is struggling with overcapacity, a
faltering global economy and a reduction in subsidies for
renewable energy by cash-strapped governments.
Earlier this month, Vestas reported its lowest third-quarter
order inflow in at least five years. It has also warned 2013
will be tougher than this year.
"A potential share issue will not be demanded by the banks
now and that is an absolute positive," said Alm Brand analyst
Michael Jorgensen in response to the loan facility agreement.
"The question is still how clients will react to a highly
geared Vestas," he added, noting they might have concerns about
dealing with an indebted company as wind turbine deals often run
for about 20 years.
At 1305 GMT Vestas shares, which have plunged around 95
percent in value from their highs of 2008, were up 17.5 percent
at 30.62 Danish crowns.
Vestas, battling to restore investor confidence after profit
warnings in October 2011 and January 2012, said the deal with
its nine international banks showed their support for its
business model and confidence it could cut debt in future.
"The agreement brings calm for us, for the banks, for
shareholders and also for the big clients. That is what is
important for us," said chief financial officer Dag Andresen.
"It also means calm while we adjust to a lower order intake
in 2013," Andresen said.
A LONG WAY TO GO
Vestas has been slashing jobs and pulling out of
unprofitable projects to cope with tougher market conditions.
Some analysts said there was still a long way to go.
"They have fewer (loan) facilities available than at the
start of the year, so I don't think this is saving the company,"
said Sydbank analyst Jacob Pedersen.
"But seen in the light that the banks could have pulled the
rug away from under the feet of Vestas, or forced it to raise
capital, this is of course positive news," he added.
Last month, Spanish wind turbine maker Gamesa
unveiled plans to cut 20 percent of global staff and slash
output as part of a drive to break even in 2013.
Vestas has been the subject of takeover speculation for
months as it became clear it needed funding. It said in August
it was in talks with Japan's Mitsubishi Heavy Industries
about some kind of cooperation.
Andresen declined on Monday to give an update on how those
talks were progressing.
The lending facility consisted of a 250 million euros
amortising term loan and a 650 million euros revolving credit
facility, Vestas said.
($1 = 0.7717 euros)
(Additional reporting by Shida Chayesteh and Kristian
Mortensen; Editing by Hans-Juergen Peters and Mark Potter)