Troubled construction giant Royal Bam is not ruling out a sale of its Irish subsidiary but says that claims it has already put the €300 million-a-year business on the block are “premature”.
The Netherlands-based building group revealed this week that it is planning €100 million a year in cost cuts after problems with projects in Germany and Britain left it facing losses of €75 million.
In a statement, the group indicated that the measures it is considering include the sale of assets and businesses. The moves are designed to ensure that it remains within the terms of loan agreements with its banks.
It was claimed yesterday that it has already earmarked local subsidiary, Bam Ireland, which employs 750 staff and 1,200 sub-contractors, for sale.
A spokesman for the Dutch group said it has not ruled any such move in or out at this stage, but described the claims as premature. “What we have said to analysts is that there are no sacred cows, we will look at any opportunity,” he explained.
No decision
“It is far too early to make any firm statement with regard to any part of the group,” he said, adding that it has not yet made any decisions about what may or may not be sold. The spokesman said the Irish business is performing relatively well, particularly when compared with its parent group’s operations in the
Netherlands
.
Bam Ireland chief executive, Theo Cullinane, said that its operations are profitable and its parent's statement will have little impact on the business here. Its turnover last year increased 30 per cent to €306 million and it has won a number of high-profile contracts. "The Irish business had a very strong performance in 2013, continuing into 2014 and we improved and strengthened our financial position through a number of significant projects at home and abroad," he said.
Mr Cullinane said it was one of the few companies in a position to bid for large-scale construction projects here. Last year it won a €250 million contract to upgrade the N7/N11 motorways.
Beamish brewery
It is also involved in a proposed joint venture with
Heineken
to redevelop the old Beamish Brewery in Cork city as a 6,000-seat venue, a project that would attract €16 million in State funding if its bid were successful.
“There is a pipeline of major opportunities in the Irish market and BAM Ireland will continue to focus on securing more public- and private-sector projects domestically as well as internationally,” Mr Cullinane said.
He also said the prospect of a €2.2 billion stimulus package for construction combined with signs that the Republic is emerging from recession, in contrast with other European countries, would leave BAM Ireland well-positioned.
Its parent said the problems responsible for its current financial difficulties were unexpected. “Adverse ground conditions” hit a large-scale project in Germany and keeping the work going on schedule proved more costly than anticipated.
Similar problems and bad weather meant a medium-sized project in Britain also ran into trouble.
