M&E giant Imtech rocked by 100m euro write-off

Aaron Morby 11 years ago
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The Dutch-based building services contractor Imtech is in talks with banks after suddenly writing off 100m euros on jobs in Poland.

The crisis is expected to impact on the group and its ambitious growth plans for its UK arm, which only last month said it aimed to be a £1bn turnover M&E contractor in the UK by 2015.

This morning Imtech revealed it had been forced to postpone publication of annual results tomorrow while it uncovered details of the Polish contract problems.

The local Polish management team has also been suspended.

The write-off covers three projects for the unfinished Adventure World Warsaw leisure development and one project involving energy-generating bio power stations in the city. These projects have a combined value of 757m euros.

Imtech has established that the advanced payments for the four Polish projects do not comply with the agreements made because its clients have not secured financing.

The huge costs incurred by the contractor mean that Imtech will no longer fulfil its covenants with lenders.

In a statement this morning it said: “Royal Imtech has been severely harmed by lack of financing of its largest customer in Poland and possible irregularities in respect of Imtech projects in Poland.

“Imtech has ordered a forensic investigation into the situation that has arisen.

“Imtech’s board expects at least 100m euro in already incurred costs will be written-off. Because the exact amount of the write-off cannot be accurately determined at this moment, Imtech’s financial statements for 2012 cannot be drawn-up.”

The board also said that a promisory note for 200m euros accounted in cash flows in the first half-year results for the Adventure World Warsaw project would have to be reclassified.

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