UPDATE 2-Imtech taps shareholders for cash after writedowns triple

Wed Feb 27, 2013 5:12am EST

Related Topics

* Launches 500 mln euro rights issue

* Investigations in Poland, Germany to take several more weeks

* New CEO says no similar problems discovered in other countries

* Shares fall as much as 15 percent (Ads details, background)

By Anthony Deutsch

AMSTERDAM, Feb 27 (Reuters) - Dutch engineering company Imtech has tripled project writedowns, forcing it to make an emergency cash call and bring forward the appointment of a new chief executive to deal with the crisis.

Imtech, whose business spans electrical and mechanical engineering and information technology, surprised investors three weeks ago with an investigation into possible irregularities at its Polish projects and a 100 million euro writedown.

On Wednesday the company raised that figure to 150 million and said it was taking another 150 million euros to cover problems in Germany.

Chief Executive Gerard van de Aast, who has taken over a month ahead of schedule, said the full costs will not be clear until an investigation into activities in the two countries is complete.

Imtech on Wednesday announced a 500 million euro ($654 million) rights issue to bolster its balance sheet and said it will not pay a dividend for 2012, and possibly longer, and will postpone possible acquisitions until 2015.

Imtech shares plunged an initial 15 percent, triggering a temporary suspension. At 1005 GMT they were down 10.5 percent.

Van de Aast, who was recruited from outside Imtech, has replaced Rene van der Bruggen who retired.

Imtech's group chief financial officer, Boudewijn Gerner, and two top executives for its German operations, which were responsible for the Polish business, have stepped down.

Two directors at Imtech's Polish business have been suspended, the company said.

The CEO, who joined Imtech at the start of the year, said he had not discovered similar problems in other countries in an initial review of operations.

Imtech, which employs 29,000 people, also operates in the Benelux and Nordic countries, the UK, Ireland, Spain and Turkey.

"We hope to have a certainty at the release of our annual results (in April)," Van de Aast said.

Investigations at its German and Polish subsidiaries will take several more weeks.

TARGETS DROPPED

The writedowns in Poland are for Adventure World Warsaw, a theme park, and other projects and in Germany for past debts, lower estimates of work in progress and earlier losses.

Imtech said the writedowns will cut profit margins in the region. It dropped group sales and profit targets for 2015.

The company said it expects an EBITA margin of 4-6 percent for the German and Eastern European operations, lower than in the past, but in line with the average for group profitability.

"Recent developments in Poland and Germany and the related writedowns require a tightening of the quality and effectiveness of our business controls. Our financial structure also appeared to be lacking in robustness," Imtech said.

A temporary bridge facility of 500 million euros will be provided by ING Groep and Rabobank for 2013. Imtech said 300 million euro will be made available immediately and a further 200 million euro will follow after agreements are reached with its major lenders.

($1 = 0.7649 euros) (Additional reporting by Gilbert Kreijger; Editing by Erica Billingham)

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