* Loss widens to 696 mln euros after accounting fraud
* Debt restructuring comes with high rates, tight covenants
* Some analysts see value in stock after 75 pct slide
* Swiss criminal investigation new worry for investors
By Geert De Clercq
AMSTERDAM, March 18 Dutch engineering services group Royal Imtech said it would focus on debt reduction as it recovers from an accounting fraud scandal that hammered its share price last year.
The firm, once one of the star performers on the Amsterdam bourse, said on Tuesday its losses widened and revenue fell in 2013 in the wake of the fraud that led to the departure of its chief executive and chief financial officer.
It announced a debt restructuring that will force it to pay high interest rates and adhere to strict covenants that could give its creditors an equity stake in the company if it does not meet an agreed debt reduction target.
The 150-year old firm - which put the first electric lighting in Dutch buildings in the 19th century - said it had agreed to cut debt by at least 650 million euros ($904 million) by the end of June 2015. Its net debt stood at 745 million euros at the end of last year.
Industry specialists say the restructuring is a humiliation for Imtech, which in the decade after its 2001 stock market listing more than doubled its turnover through dozens of takeovers and became a leading European player in outsourced building services like heating, cooling, ventilation and other electrical and mechanical engineering contract work.
Imtech, which has a strong presence in the Benelux, Germany and Scandinavia, competes with French Vinci unit Cegelec, GDF unit Cofely, privately held Spie, German engineering and services group Bilfinger and Finnish building services and maintenance firm Caverion.
Analysts say the firm remains a force to be reckoned with in the fragmented engineering services industry, but its financial problems are set to damage its client relationships.
"The question is whether customers keep confidence in the firm," Kepler Cheuvreux analyst Andre Mulder said, noting that the firm's fourth-quarter order remained weak.
The firm's 2013 net loss widened to 696 million euros from 241 million euros in 2012 as revenue fell to 4.9 billion euros from 5.3 billion in 2012. Its order intake stood at 4.7 billion at the end of 2013, down from 6.5 billion a year before
Mulder said, however, its stock might present a buying opportunity.
"Things are going in the right direction, despite the losses, maybe now is the time to buy," he said. He added he saw a potential upside of 10 percent, but was less optimistic than four to five months ago, when he saw an upside of 30 percent.
Since Imtech warned of irregularities at its Polish theme park and green power projects in Feb. 2013, its stock has fallen 75 percent and now trades below 2004 levels.
The firm was forced to make an emergency 500 million euro rights issue in July after taking write-downs of 370 million euros, and has announced 2,250 redundancies.
At the end of last month, it faced more bad publicity when its Swiss unit's chief resigned over an ethics issue.
Imtech said on Tuesday that its initial findings confirmed that there was a "non-business like relationship" between former management of Fritz & Macziol Schweiz and certain civil servants, which was reflected in "excessive entertainment, overly informal contacts and questionable business behaviour".
"The potential financial exposure of this affair is difficult to assess, but judged to be limited," t said.
A Swiss criminal investigation into the case is ongoing.
The debt restructuring announced on Tuesday gives the firm access to 1.3 billion euros of committed credit facilities and 843 million euros of committed guarantee facilities.
If it fails to reach its June 2015 debt reduction target, fees of 25 million euros will accrue at the end of June and September 2015 and twice a year thereafter.
It would also be required to issue warrants to its financiers for up to 10 percent of capital.
"We do not recommend buying the stock; we have not seen the end of the company's troubles yet," said ESN/SNS Securities analyst Edwin De Jong. ($1 = 0.7188 euros) (Editing by Pravin Char)