Shares in Carillion have plummeted more than 40% and were temporarily suspended after the troubled construction group warned over profits and said it will breach its financial covenants.
The group said annual profits looked set to be "materially lower than current market expectations" as it grapples with a string of delays and smaller-than-expected improvements to margins on certain contracts.
Despite efforts to drive down costs, haul in cash and push through disposals, the group said it would fail to hit its net debt to earnings ratio of 1 to 1.5 times by the end of 2018.
As a result, the firm expects to breach its financial covenants by the end of December this year, with annual average net borrowing to come in between £875 million and £925 million.
Chief executive Keith Cochrane said: "Whilst we continue to target cash collections, reduce costs, execute disposals and focus on delivering for our customers, it is clear that significant challenges remain and more needs to be done to reduce net debt and rebuild the balance sheet.
"Constructive dialogue is continuing with our financial stakeholders, and I am grateful for their support.
"I remain focused on addressing this issue before my successor, Andrew Davies, takes up the role on April 2 2018."
Carillion pinned the latest profit warning on delays to PPP disposals and the start of a major project in the Middle East.
Margins on UK support services contracts also improved at a lower level than expected, but this was partly countered by cost savings in the fourth quarter.
The group said it could "require some form of recapitalisation" as it mulls options to curb its debts and shore up its balance sheet.
Nicholas Hyett, Hargreaves Lansdown equity analyst, said the "horror show" at Carillion had continued.
He added: "Some sort of recapitalisation was inevitable, but a possible debt for equity swap, with debt even higher than the group had anticipated, is probably as bad as anyone would have guessed.
"The group has made some progress on asset sales, and it sounds like some cost savings are being made.
"It's not what the group expected though, and it's clearly not enough.
"It's also probably irrelevant given the state of the balance sheet, with net debt already many multiples of the group's market capitalisation."
Carillion, which has about 43,000 staff worldwide, has endured an ongoing crisis this year after revealing mammoth half-year losses totalling £1.15 billion following a series of restructuring charges.
A previous profit warning saw former boss Richard Howson step down, with Carillion replacing him with Mr Davies, who is to take the hot seat in April.
Mr Davies is currently the chief executive of Wates Group, where he has held the role since 2014.
Since Mr Howson's departure, Mr Cochrane has been interim chief executive and has overseen a refinancing and the sale of non-performing assets.
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