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Royal Imtech Stock Drops by Almost Half On Adventure World Concerns

827484by Joe Kleiman, IPM News Editor

Gouda, The Netherlands (February 5, 2013) — Dutch multinational Royal Imtech is a worldwide provider of electrical services, information and communications technology, and mechanical services.  The company reports an annual revenue of €5.1 billion.  On Monday, February 4, 2013, Imtech announced that it will be postponing its 2012 financial statements due to irregularities with its Polish projects, primarily the Adventure World theme park and resort under construction near Warsaw.

According to Imtech: “The write-off of at least 100 million euro relates to three projects for Adventure World Warsaw and one project involving energy-generating bio power stations, also in Warsaw. These projects have a combined value of 757 million euro.

“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.

“. . . The Board of Management has also determined that a promissory note and pledged accounts related to the Adventure World Warsaw project – amounting to around 200 million euro – that had been recognised in the half-yearly 2012 financial statements under cash and cash equivalents must, according to IFRS, be reclassified under current financial assets. Most of this amount was recognised as an advance payment under work in progress for the four projects concerned. This advance payment was considerably higher than the incurred costs. As stated above, the advance payments have not become available to Imtech. The effect of this is incorporated in the expected write-off of at least 100 million euro.”

Imtech has suspended the management of its Polish projects and is beginning a “forensic investigation” into “possible irregularities.”

At close of day February 4, Imtech’s stock value had dropped by 47%, with Bloomberg now valuing the company at €992 million based on the end of day stock price.

Adventure World’s management responded to the developments at Imtech, stating “Given that the project development phase of the park construction is to be completed this month, the board of AWW is confident that the long term finance will be secured latest in in the second quarter of 2013.

“It now becomes apparent that the situation at Imtech will not be without an influence over the construction of AWW theme park. However, the board of AWW remains confident that Imtech Poland will properly perform as a general contractor for AWW park construction and offers any needed assistance in investigation of irregularities that has been reported at Imtech Poland.”

Other Dutch companies involved in the design and construction of Adventure World include Jora Vision, Vekoma, Hellebrekers, and Tebodin.  At this time, it appears the issue at hand only involves Imtech.  InPark Magazine contacted Jora Vision, the master planner and design firm for Adventure World, and was told that they had been paid in full and “are happy to design this beautiful project.”

IPM News will continue to report on this story as it develops.

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