A COMPANY involved in rebuilding the schools of Liverpool and Wirral in contracts worth hundreds of millions of pounds is desperately fighting for survival.
Beleaguered engineering group Jarvis saw the value of its shares plunge by another third yesterday - after already dropping by 50% on Friday.
The collapse in the share price follows last week's news that the company could breach its banking covenants.
Stock in the firm dropped more than 36% yesterday, or 12.75p, to 22.25p as investors continued to react with dismay to that announcement.
Jarvis is involved in a 30-year £300m rebuilding and maintenance programme at 21 schools in Liverpool, the biggest such deal in the UK.
A similar £55m deal for nine schools covering 25 years is in place in Wirral, involving schools such as Wirral Grammar for Girls, Bebington High, South Wirral High in Eastham and Prenton High in Birkenhead.
Though much rebuilding work has been completed, the maintenance part of the contracts now appears in doubt as Jarvis fights for its future.
On Friday, the company revealed charges and write-offs that could top £141m and debts of £230m - against £83m at the end of last year.
One broker, Investec, said the company was fighting for its survival and described its balance sheet as being in a "desperate state."
Another broker, Arbuthnot, said Jarvis had been getting revenues and costs wrong since its first profits warning in June 1999. It said Jarvis appeared unlikely to be able to reach the end of July in its current form.
The possible collapse of the company will cause considerable concern to both Liverpool and Wirral councils.
Wirral South MP Ben Chapman said: "The slide in Jarvis share value is worrying as is the news of the serious problems the company faces, especially given the fact that their relationship with Wirral schools is set to be a long one.
"There have been a host of different problems with the work at local schools but it remains the case that on completion of this work children will benefit from improved facilities in their schools on a scale not seen for many years."
But Liverpool's education member for education Cllr Paul Clein last night said the council was well protected in the event of the collapse of the Jarvis group.
He said: "The PFI deal we have with Jarvis is underwritten by major banks and if Jarvis went belly-up, it would be their duty to find a new contractor."