AMSTERDAM Aug 26 Dutch engineering services group Royal Imtech has agreed to sell its information technology division to French construction firm Vinci for 255 million euros ($337 million) to reduce debt levels, it said on Tuesday.
Imtech stock has taken a beating since it wrote down projects in Poland and Germany in an accounting fraud that drove it to a net loss of nearly 700 million euros in 2013 and prompted a management shake up.
The firm was forced to make an emergency 500 million euro rights issue in July 2013 after taking write-downs of 370 million euros, and announced 2,250 redundancies.
Imtech said it had made an operational loss before interest tax, depreciation and amortisation of 24.9 million euros in the first half, less than half the 58.7 million loss it made in the same period of 2013, off revenues of 1.95 billion euros, down slightly from 2.16 billion last year.
The 150-year old firm - which put the first electric lighting in Dutch buildings in the 19th century - said it had agreed a fully underwritten 600 million euro rights issue with a consortium of banks, as part of which it would be freed from financial tests related to its borrowing agreements until the first quarter of 2016.
"The sale of the ICT division combined with a fully underwritten rights issue and significant changes in the financial agreements ... will significantly reduce debt and improve the financial structure," said Imtech CEO Gerard van de Aast.
"The support from all our financiers and in particular from ING, Rabobank, Commerzbank and ABN Amro is a strong signal of confidence in the company," van de Aast said, adding that the agreements with lenders would substantially reduce the company's financing costs.
The sale of the information technology division, which had revenues of 740 million euros in 2013 and 2,400 staff, is subject to regulatory approval, but the company said it expected the deal to close well before the end of the year.
($1 = 0.7575 Euros) (Reporting by Thomas Escritt; Editing by Mark Potter)