Royal Imtech NV, the Dutch provider of 2012 London Olympics stadium infrastructure, fell as much as 18 percent to an eight-year low on a 500 million-euro ($654 million) share sale and writedowns in Poland and Germany.
Imtech fell as much as 1.71 euros to 8.01 euros in Amsterdam trading, reaching the lowest intraday level since March 2005. The Gouda-based company said it will use the proceeds from the rights offer to cut debt, and write down about 300 million euros in total on Polish and German projects.
The company dropped its 2015 revenue and margin targets and will refrain from doing takeovers this and next year. Imtech named Gerard van de Aast, 55, chief executive officer, with immediate effect, replacing Rene van der Bruggen, 65.
“We cannot help but be amazed by the negative turn of events,” Edwin de Jong, an Amsterdam-based analyst at SNS Securities said in a note to investors. “It will take a long time before trust and confidence is restored.”
Imtech will take a 150 million-euro writedown because of valuation problems with projects and debtors in Germany and write down the same amount on Polish projects, including a 680 million-euro contract that Imtech said was its largest order ever.
The shares traded 11 percent lower at 8.70 euros as of 11:12 a.m. in Amsterdam, valuing the company at 817 million euros.
The projects subject to impairments include final completion of Adventure World Warsaw, a 240-hectare (575-acre) theme park and resort to include hotels, restaurants and 25 attractions. Imtech earlier suspended its Polish management pending a forensic probe, while its German unit’s chief executive and financial officers stepped down earlier this month.
Imtech’s shareholders will have to approve the company’s rights offer, which is guaranteed by means of a volume underwriting commitment by ING Groep NV and Rabobank Groep. ING AM Insurance Companies will support the share sale in proportion to its 5.19 percent stake, Imtech said.
“Raising 500 million euros will likely double the number of shares,” Andre Mulder, an Amsterdam-based analyst at Kepler Capital Markets, said in a note to investors.
ING and Rabobank also agreed to provide a 500 million-euro bridge loan, of which 300 million euros is available immediately and the rest after reaching an agreement with the major lenders.
Imtech, which earlier saw an impairment of at least 100 million euros in Poland, said today the forensic investigation is under way and will take several more weeks. The German impairment relates to a writedown of old debtors, a lower estimation of work in progress and losses passed on to the future without proper justification, Imtech said.