Talgo’s Financial Crisis Deepens: Heavy Losses, Takeover Bids, and Urgent Debt Restructuring

Talgo is at a crossroads. A EUR 107.9 million loss, a EUR 116 million penalty from Renfe, a fierce bidding war, and a debt that's to be paid over the next three years have shaken the Spanish train maker. With Basque steel giant Sidenor poised to take control and rival investors circling, the company’s fate hangs in the balance. Will Talgo remain in Spanish hands, or will a last-minute offer change everything?

According to Reuters, Spanish train manufacturer Talgo (TLGO.MC) has posted a full-year net loss of EUR 107.9 million, a significant downturn from its EUR 12.2 million profit a year earlier. The financial blow was primarily caused by a EUR 116 million penalty imposed by state railway operator Renfe, following delays in train deliveries. The company is also under pressure to restructure its debt, with EUR 318.8 million in repayments due by 2027 out of its total EUR 405.4 million debt, according to La Voz de Galicia.

💰 #ECONOMÍA

Talgo tiene que pagar 318 millones de su deuda en los próximos tres años #Renfe #Sidenor //t.co/PiXqtOsQZQ

— TodoNoticiasWeb (@TodoNoticiasWeb) March 6, 2025

The financial setback comes at a crucial time for Talgo, as ownership changes and acquisition bids continue to shape the company's future. Market Screener reports that Basque steelmaker Sidenor has agreed to acquire 29.7% of Talgo, marking a decisive moment in months of competitive bidding for a stake in the manufacturer.

Sidenor Moves Forward with Acquisition, Pending Approval

Sidenor’s offer, backed by the Basque regional government and local lender Kutxabank, values each Talgo share at EUR 4.15, with an additional EUR 0.85 per share if financial targets are met, as noted by Reuters. If finalized, the acquisition would return Talgo’s decision-making center to the Basque region, an outcome welcomed by local officials. "The return of the decision-making center to our territory means that we recover one of our industrial hallmarks," said Ramiro Gonzalez, head of the Alava province in the Basque Country.

The deal is yet to receive final approval, and some shareholders are holding out for a better price. As RAILTARGET previously reported, Talgo’s valuation has fluctuated due to financial struggles and past acquisition offers, with some previous bidders willing to pay as much as EUR 5 per share.

La carrera por Talgo entra en su recta final con tres posibles ofertas sobre la mesa.

Estas son las el grupo siderúrgico vasco Sinedor, del Fondo Polaco de Desarrollo (PFR), propietario del fabricante de trenes Pesa; y de la india Jupiter Wagons.//t.co/milbr0qifO pic.twitter.com/Mptr5Ajtel

— EFE Noticias (@EFEnoticias) February 2, 2025

Polish and Indian Investors Enter the Race

The bidding war for Talgo took another turn in early February when Poland’s state investment fund PFR announced plans to bid for a 40% stake in the company. According to Reuters, PFR’s offer was seen as a rival bid to Sidenor’s, and had the potential to trigger a full takeover, as Spanish law requires any investor acquiring more than 30% of a listed company to make a public acquisition offer.

However, PFR ultimately dropped its bid after opposition from the Spanish government. Reuters reports that officials, including Economy Minister Carlos Cuerpo, had expressed concerns over Talgo’s employment and production staying in Spain. Following the collapse of PFR’s bid, Talgo shares fell by 7.4%.

Meanwhile, Indian company Jupiter Wagons has reportedly expressed interest in Talgo. According to RAILTARGET, it remains unclear whether Jupiter Wagons will make an independent bid or collaborate with Sidenor, but the potential involvement of an Indian investor adds further complexity to the ownership saga.

Technical Failures and Renfe Penalty Intensify Challenges

Adding to Talgo’s troubles, the company suffered a high-profile technical failure on January 1, 2025, when Renfe’s entire fleet of Series 106 Avril high-speed trains became inoperable. As Railway Gazette reports, the issue was traced to a software malfunction in the Ingeteam charging system, which failed to recognize the new year change and disrupted onboard controls.

While the issue was resolved within 24 hours, the financial damage was estimated at EUR 1 million, as Renfe was forced to refund tickets and provide alternative transportation. The incident further undermined Talgo’s reputation at a time when investors and shareholders were already concerned about delivery delays and financial penalties.

What Lies Ahead for Talgo?

With its ownership in flux, financial losses mounting, and ongoing technical challenges, Talgo faces a critical turning point in 2025. The sale of the company is expected to be finalized soon, but negotiations over pricing and strategic control remain ongoing.

While Sidenor appears to be the favored buyer by the Spanish government, some stakeholders continue to push for a higher offer, citing past acquisition attempts that valued Talgo at EUR 5-6 per share. Meanwhile, the company must navigate its strained relationship with Renfe, as further penalties could exacerbate its financial struggles.

As Europe continues to prioritize rail as a sustainable transport solution, Talgo remains an attractive asset for international investors. However, its future direction will depend on whether Sidenor’s bid prevails—or if another player enters the race at the last moment.

Source: Reuters; Market Screener; RAILTARGET; Railway Gazette