Pan-Euopean services player Imtech is expecting to write off more than €100m (£86m) for the 2012 financial year and breach its lending covenants after uncovering financial irregularities across four big Polish projects.
The Netherlands-headquartered outfit is to launch a forensic investigation into its deals with four Warsaw-based projects: three with the Adventure World resort, and one "involving energy-generating bio power stations".
"Imtech has established that the advanced payments for the four Polish projects do not comply with the agreements made with the customer regarding the availability of the payments to Imtech. This is because the customer has not secured its financing," said an Imtech statement issued today.
Until the size of the write-off is determined, Imtech is holding fire on releasing its 2012 results, which were due for publication tomorrow. But the services giant is bracing itself to have to swallow a write-off of at least €100m.
"The consequence of the expected write-off will be that, when its 2012 financial statements are drawn up, Imtech will no longer fulfil its covenants with lenders – average ratios of 3.0 maximum for net debt/EBITDA and 4.0 minimum for interest coverage," added the statement. "As a result, Imtech will begin consultations with its lenders."
A total of about €200m, which was recognised as cash or cash equivalents in Imtech's H1 2012 statements, was reportedly due to have been paid in advance by Adventure World.
"This advance payment was considerably higher than the incurred costs," explained the statement. "The advance payments have not become available to Imtech."
Management staff in Poland have been suspended, pending the commencement of the investigation.
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