The troubled infrastructure firm Mouchel says it will announce a balance sheet restructuring by the end of July but is warning 'all the options being considered will result in there being only limited value for existing shareholders'.
The announcement has seen the share price plummet 28% in morning trading.
Mouchel shares have lost 94.5% of their value in the last 12 months after a series of contract problems and management resignations. The company, which helps build and maintain major infrastructure like schools and roads, also had to agree new financing terms with its banks as tough trading conditions exacerbated the poor operational performance.
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Today's release says the underlying business is performing well "despite ongoing uncertainty about the balance sheet". There have been £165m in new contracts secured so far this year and the total order book is "stable" at £1.1bn.
Grant Rumbles, the Chief Executive Officer of Mouchel said: "We have continued to work with our clients, employees and key stakeholders to implement our strategic actions and are encouraged by the good progress made since the interim results.
"The final piece to setting this platform for securing the long term future of the business is to complete the restructure of the balance sheet and we remain on track to announce this by our financial year end on 31 July 2012."
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