Jarvis borrows another £31m

TROUBLED rail and road engineer Jarvis is set to all but wipe out its existing shareholders after announcing further emergency borrowings ahead of a £300m debt-for-equity rescue later this summer.

News of the latest twist in attempts to save the company sent the shares diving 6p to 5p, valuing the company's equity at just £8m. Jarvis is borrowing a further £31m 'to meet its immediate and short-term funding requirements'.

That comes just a fortnight after chief executive Alan Lovell said borrowing more money on top of the £17m short-term debt raised in March ahead of the debt-for-equity swap was 'very unlikely'.

Jarvis, brought to its knees last year by disastrous forays into the Private Finance Initiative, admitted today the rescue restructuring will see current shareholders left with just 5% of the firm. It also said it expected to raise £50m from an issue of new shares after the rescue.

Negotiations are at an advanced stage but not finalised, the company added.