SERCO’S shares plummeted almost 20 per cent yesterday morning and closed 15 per cent lower, after the struggling outsourcer warned a downgrade to profit forecasts and a rights issue may be on the cards.
The scandal-tainted FTSE 250 company did not give further details, but analysts at Liberum and Investec forecast a 20 per cent downgrade to earnings.
Serco may need to tap investors for up to £500m, according to Investec.
The firm, which recently paid £68.5m back to the government after overcharging on a prisoner-tagging contract, had already warned in January that profits would fall in 2014.
Serco declined to comment, but said it plans to make another announcement later this week.