Shares in Interserve have plunged by almost 30% after the construction and support services company issued another profit warning after trading in the third quarter deteriorated.
The company added it might also breach its banking agreements.
Interserve said operating profit in the second half would be about half that of last year.
It has also made an additional £35m provision for abandoning the energy-from-waste market.
That brought the total set aside for exiting such contracts to £195m.
Interserve’s contract to build a recycling and renewable energy plant in Glasgow was terminated by Viridor in February following extensive delays.
The company’s shares had already crashed by more than 50% last month after it issued a profit warning.
The latest fall means the stock has fallen by more than 80% this year, valuing Interserve at just over £90m.
The company employs about 80,000 people worldwide in 38 countries.
Debbie White, who started as chief executive on 1 September, said there was “considerable potential for business improvement across the company”.
“My team will focus on improving our margin performance in UK support services and ensuring good contract selection in UK construction, while reducing our cost base across the company,” she added.
Interserve’s order book is worth £7.4bn and recent contract wins include the Work and Pensions and Transport departments as well as the Ministry of Justice and Durham University.
Despite the collapse in the shares, analysts at Liberum are optimistic about the company’s prospects, rating Interserve as a “high risk buy”.
“We believe that, like Serco and Mitie, thoughts will quickly turn to the recovery potential in the business,” they said.
“Clearly there is financial risk. However, we believe that Interserve can muddle through without a debt-for-equity swap and it has assets to sell.”