* CEO Uwe Krueger to leave immediately
* Board member Hans Ziegler appointed interim CEO
* To cut 2,500 more jobs; to return to profitability by 2010
* Shares fall 5 percent
(Updates shares, adds analyst, background)
By Katie Reid
ZURICH, Aug 25 (Reuters) - Oerlikon's main shareholder Renova pushed Chief Executive Uwe Krueger out of the Swiss technology group on Tuesday as it posted its latest set of disappointing results and launched another round of cost cutting.
Oerlikon, in which Russian billionaire Viktor Vekselberg holds a 45 percent stake through his holding group Renova, recorded a first-half net loss of 99 million Swiss francs ($93.4 million) as demand tumbled in its textile unit .
"The results were not satisfactory. One reason for them is the economic downturn, but this is not sufficient," Oerlikon Chairman Vladimir Kuznetsov, who is also Renova's chief investment officer, told journalists on Tuesday.
"We have the heavy burden of debt and we have to make fast decisions," Kuznetsov said. "We're facing tough times. The board needs to get involved not only in strategy deliberation but also in strategy implementation."
Board member Hans Ziegler, who one Zurich-based trader said has a good reputation as a turnaround manager, will take up the helm with immediate effect until the board picks a new CEO, which could take between four and nine months.
"Renova Group is convinced that (Ziegler) is the right person to steer OC Oerlikon through a challenging economic environment and guarantee the interests of all company stakeholders," said the shareholder, which holds three out of five seats on Oerlikon's board.
The management shake-up comes just days after Renova oversaw the election of Juergen Dormann as chairman of Swiss engineering group Sulzer, in which the Russian company holds a 31 percent stake, after forcing out former chairman Ulf Berg.
Oerlikon, which issued several profit warnings last year and posted a full-year loss for 2008, said it would look to save another 400 million francs and is considering various steps to strengthen its balance sheet, such as going for a capital hike.
The group also plans to axe another 2,500 jobs after cutting 1,500 positions in the first half. The group has 16,500 workers.
By 1120 GMT, shares in the group had fallen 5.2 percent to 68.80 francs, underperforming a near-flat Swiss mid-cap index.
Oerlikon makes a range of products from coatings used in Formula One racing cars to machines used to make solar cells.
"The outlook is still looking stormy as it faces dwindling orders of nearly 40 percent," Wegelin analysts said in a note.
"Moreover the finances are not sorted, which is definitely clear from the priorities they are setting themselves. The Oerlikon share is still one for investors with nerves of steel and who love risk," they said.
PROFITABLE BY 2010
Oerlikon will now focus on strengthening its balance sheet either through a capital hike or by getting rid of debt, Kuznetsov said. The group has said it is looking to sell its textile and drive systems units.
Oerlikon is due to pay 600 million francs as part of the first tranche of the syndicated loan worth 2.5 billion at the beginning of 2010. Oerlikon's net debt was 1.8 billion francs at the end of June and its level of equity was around 20 percent of total debt, Kuznetsov said.
Helvea's Reto Amstalden said it may become hard for Oerlikon to avoid going for a capital hike due to the cash drain and further weakening of the balance sheet.
Oerlikon is aiming to return to profitability by 2010 and said it had seen some encouraging signs in its textile, coating, vacuum and systems divisions, and volumes for the group as a whole should be marginally higher in the second half.
"A sustained recovery, however, is not expected until 2010 at the earliest with the key impetus for this expected to come from Asia. The increasingly positive signs from China in particular are encouraging," Oerlikon said. (Editing by Jon Loades-Carter and Rupert Winchester) ($1=1.060 Swiss Franc)