Shares in the infrastructure and construction firm Carillion are down 38% in early trading in the wake of a sales warning.
The company has warned that its annual results would be “below management’s previous expectations”.
The company said it would undertake a “comprehensive review” of the business.
It also said its chief executive Richard Howson, would step down and be replaced by Keith Cochrane while the company looks for a permanent boss.
Carillion’s projects have included the first phase of the Battersea Power Station development and the extension of Liverpool ’s Anfield football ground.
The company, also has a number of public private partnerships (PPP).
Consultants KPMG have been reviewing its businesses.
As a result of that review, it has set aside £845m in provisions, of which £375m relates to the UK and £470m to overseas markets, the majority of which relates to exiting markets in the Middle East and Canada.
Carillion will also suspend its dividend payout to shareholders.
Philip Green, Carillion’s non-executive chairman, said that the action is needed to reduce the firm’s borrowing: “We must take immediate action to accelerate the reduction in average net borrowing and are announcing a comprehensive programme of measures to address that, aimed at generating significant cashflow in the short-term.”
Analysis: Rob Young, business reporter
The chairman says the firm needs to take “urgent action” and so will carry out a root and branch review of the business. That means it will likely end up selling off or shutting down parts of the company.
It has already said it’s getting out of the construction game in Qatar, Saudi Arabia and Egypt. We’ve no idea what it might mean for jobs – it employs 48,000 people worldwide. Hedge funds have long suspected there was something up with Carillion’s finances. Speculators have been betting against the firm’s share price for a while. It turns out they were right.