Talgo to Receive Government Funding for Tenders

Talgo to receive government funding for participation in international tenders — the Spanish government will allocate €150 million to stabilize the company’s finances. This is reported by the railway transport news portal Railway Supply.

Spain’s state holding SEPI will provide train manufacturer Talgo with approximately €150 million in the form of a convertible loan. This decision aims to ensure Talgo’s ability to bid in international tenders while maintaining liquidity despite ongoing financial challenges. The loan comes with a high interest rate but can later be converted into equity in the company.

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According to El Economista, the funds will be directed to the investment fund Trilantic, which had previously agreed to sell a 29.77% stake in Talgo to a consortium involving steelmaker Sidenor and various governmental and financial institutions from the Basque Country. This financial structure helps avoid EU restrictions on direct state aid.

Talgo to receive government funding despite financial losses

Although Talgo reported record revenues of €669.2 million in 2023, the company ended the year with a net loss of €107.9 million and financial debt totaling €403.8 million. A major contributing factor was a €116 million penalty imposed by national operator Renfe for delayed deliveries of Avril high-speed trains — representing over 17% of Talgo’s annual revenue.

However, the company reached an agreement with Renfe to defer the payment for seven years. Starting in 2031, the penalty will be converted into a long-term interest-bearing loan. This move will protect Talgo’s liquidity in the medium term.

Government funding will support Talgo’s participation in international tenders

Meanwhile, Talgo still needs to refinance nearly €400 million in outstanding debt. Ongoing negotiations involve Sidenor, the Spanish government, and lending banks.

In this way, Talgo will receive government funding for participation in international tenders, strengthening its position in the global high-speed rail technology market.

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