Shares in Interserve plunged by over 75% on Monday after news emerged that the outsourcing firm was seeking a rescue deal.

In early trading, shares fell to just 6p, down from their 700p peak in 2014.

Interserve £500 million of debts but the group said over the weekend that it was “making good progress” on a recovery plan.

The group employs 45,000 people in the UK and a total of 75,000 people globally

On Monday morning, the group announced a new £25 million Welsh public sector contract for the redevelopment of Prince Charles Hospital in Merthyr. Work will start this month and continue till 2021.

Chief executive Debbie White said: “The fundamentals of our business remain strong.”

“The deleveraging plan will give Interserve a strong long-term capital structure and provide a solid foundation on which to build the future success of the group.”

The firm said in a statement: “Although the form of the deleveraging plan remains to be finalised, it is likely to involve the conversion of a substantial proportion of the group’s external borrowings into new equity, an element of which may be sold to existing shareholders and potentially other investors.”

When shares crashed in early trading, the value of Interserve fell less than £9 million.

Unite, the UK’s biggest union, has called on ministers to carry out contingency plans and ban new contracts between the outsourcing firm and the public sector.

“The financial difficulties that Interserve finds itself in is another dire warning of the dangers of outsourcing public services for private profit. We could be facing Carillion mark two,” said Unite assistant general secretary Gail Cartmail.

“The mistakes made before the collapse of Carillon in January 2018 appear in danger of being repeated – if so, this could see the hard-pressed taxpayer picking up the tab – yet again.”

Shares (LON: IRV) have slightly recovered and are trading -50.6% (1619GMT).