Shares in Jarvis crashed 37% to 7p on Monday as the troubled support services group admitted it was in talks to borrow another £31.4m.
In an announcement to the stock exchange the company said that it had agreed a deal to borrow the money from Deutsche Bank “to meet its immediate and short-term funding requirements”.
The news came just two months after the company had secured a £17m emergency loan. Shares plummeted to 7p, reflecting the City’s alarm at Jarvis’ need to borrow more money.
Jarvis said the loan was part of a wider financial restructuring, which would include a debt-for-equity swap wherein the company’s lenders would exchange some of its £280m debt for a stake in the company. The statement said: “The precise form of the debt-for-equity conversion is still being discussed but it is likely to leave existing shareholders with 5% or less.”