* BAM announces 75 mln euro loss on 2 projects
* Shares tumbled more than 20 pct
* CEO rules out issuing new shares to raise capital
(Adds details, CEO quotes)
AMSTERDAM, July 7 Shares in Dutch construction
company BAM Group plunged more than 20 percent on
Monday after the builder announced heavy losses at two projects,
prompting it to promise sweeping cost cuts and consider selling
The company pledged cost savings and property divestments
netting some 200 million euros ($272.81 million) a year. Chief
Executive Nico de Vries, on an analysts' call, said he was "open
minded, looking to all possibilities" regarding selling parts of
the company. He ruled out issuing new shares to raise capital.
BAM announced losses of 75 million euros - more than its
2013 profit - at two projects in Britain and Germany, the result
of poor ground conditions and unexpectedly bad weather, which
had required expensive remedial measures at both sites.
"I apologise for these results," said de Vries. "We accept
the urgent need to raise our game."
"For both projects we can now see that we bid too sharp," he
said. "We ended up bearing the contract risk for the ground
conditions and we underestimated the potential downside."
The company had tightened up on bidding procedures and could
no longer make the same mistake, he said.
BAM shares were down 24.3 percent to their lowest level
since November 2012 at 0926 GMT.
BAM, which has a workforce of 25,000 and is heavily exposed
to troubled construction and real estate markets across Europe,
has had a difficult few years and was forced to cut 500 jobs in
Earlier this month it announced the merger of its civil
engineering and roadbuilding subsidiaries, which it said would
cut management overheads.
"A healthy financial situation is the top priority," de
Vries said, announcing plans to raise the company's working
capital by 300 million euros. "We want to keep the capital ratio
above 20 percent."
The company said the cost savings were needed to keep the
company within its banking covenants. It would also consider
divesting other assets to improve results.
"I am open minded about this and will consider all options
that will unlock value and not damage the future performance of
the group," de Vries said. But he ruled out issuing new stock in
the company, which made a profit before tax, impairments and
one-off charges of 49.8 million euros in 2013.
It is due to announce first-half results on Aug. 21.
The company would use external consultants to help find ways
to cut costs, he said.
($1 = 0.7331 euros)
(Reporting by Thomas Escritt; Editing by Kenneth Maxwell and