ROYAL IMTECH AMSTERDAM (Reuters) - Dutch engineering services group Royal Imtech (>> ROYAL IMTECH) is cutting 750 jobs, raising 600 million euros (477.61 million pounds) in a share sale and selling its information technology arm in a bid to cut hefty debts that have battered its shares.
Imtech, once a darling on the Amsterdam stock exchange, has been hit over the past year by accounting fraud at its German and Polish operations. Losses widened to 224.2 million euros in the second quarter from a 170.9 million loss a year earlier, driven by one-off financial charges, it said on Tuesday.
The 150-year old company said it had agreed a fully underwritten 600 million euro rights issue with a consortium of banks and would be freed from financial tests related to its borrowing agreements until the first quarter of 2016.
Roughly 500 million euros in new capital, the second emergency raising of capital in just over a year, will be used to pay down debt, as will proceeds from the sale of its ICT division to French construction firm Vinci (>> VINCI) for 255 million euros.
"The first half of 2014 has been difficult for the company due to market conditions and the uncertainty around our financial position," Imtech chief executive Gerard van de Aast said in a statement.
"Management and employees can now focus fully on improvement of operational results and the completion of the turnaround programme," he said.
In its full year outlook, Imtech called 2014 a year of change and "given the size of this transition and the challenging market circumstances, no specific forecasts are given."
Imtech shares, which have fallen more than 80 percent this year, were up 7.1 percent to 0.42 euros at 09:25 AM BST.
The stock has taken a beating since the company 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.
The company said on Tuesday it would cut an additional 750 jobs, or more than 3 percent of its workforce of 23,000, mostly in Germany.
Van de Aast said the sale of the ICT division and the rights issue "will significantly reduce debt and improve the financial structure."
The sale of the information technology arm, 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.
(Reporting by Thomas Escritt; Editing by Mark Potter)
By Thomas Escritt
