Shares in Jarvis have plunged by more than 20 per cent after the support services contractor warned that it may fall victim to its £230 million debt burden.

The company said that there was "no certainty" that banks would agree to continue financing arrangements after a March 25 deadline.

The group's collapse might be prompted by a cashflow hole which might appear late next month if the company's fortunes suffered a "material adverse" change.

"A great deal remains to be achieved," Alan Lovell, the Jarvis chief executive, said, adding that the company was "confident of a satsifactory conclusion.

The comments came as Jarvis revealed that it had raised £25 million from Network Rail through property deals, and confirmed that it was on track that it will sell its Tube interests within the month.

The support services contractor has gained £4.5 million through a renegotiation of leases on land next to York railway station, negotiating a stake in redevelopment windfalls. Jarvis is also, for £3.5 million, selling a lease on York offices.

A further £17.0 million is to be gained through a range of disposals to Network Rail, including sale and leaseback arrangements on 23 properties.

Mr Lovell said that the deals represented a "very important step" in the company's survival strategy. The company is also in talks over the sale of its stake in Tube Lines, the London Underground maintenance business, and of its European Roads division.

The group, which in July posted a £247 million loss, last week completed the sale of its PFI bidding business to Hochtief, the German contracting giant.

The disposals are designed to focus Jarvis on its domestic rail, road and plant hire activities to create a "simpler, leader and more cash generative business".

Confidence in Jarvis, which in July came within a day of breaching its debt covenants, was hurt by the 2002 rail disaster at Potters Bar, where the company was responsible for track maintenance. The company has also been attacked for winning PFI business with bid which proved unrealistically low.

Today's statement said that results for the April-to-September half would be published later this month, once the board had finalised an assessment of provisions.

"As foreshadowed [last month], the results will show a substantial deterioration in the group's financial position," the announcement said.

Jarvis shares stood 1.5p lower at 9.25p in morning trade after slipping to 8.5p earlier.

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