If investors in Yell, the directories group, thought things could get no worse, it appears they were wrong.
Following May's announcement of a £1.2bn full year loss - after a hefty writedown - and news it would change its name to the incomprehensible "Hibu", the company now admits shareholders could be wiped out almost entirely.
The company is struggling with more than £2bn of debt - against a market value of just £26m - as it tries to make the transition from printed directories to digital products.
So far digital sales are not making up for declining print revenues, and first quarter earnings fell by £40m to £71m. Chief executive Mike Pocock said:
Whilst we continue to deliver cost savings...the decline in our legacy product revenue continues to negatively effect earnings. The group continued to generate significant amounts of cash and pay down debt. Looking ahead we remain confident in our four year strategy to transform Yell.
But in giving an update on a review of its capital structure it said:
A number of options are being considered and while no decision has been made yet, certain options may result in a dilution of existing shareholder interests.
Until this new capital structure is in place the group is unable to give a clear forecast of results for the current year. However the adverse revenue and margin trends reported in May continue to impact our current and expected financial performance.
The company's bombed out shares - which stood at 2.6p at the time of May's results announcement - have slumped another 34% to just 1.12p.
Panmure Gordon analyst Alex Degroote told Reuters:
They don't explicitly mention debt for equity but that's what it means. They're basically saying the equity could be wiped out.
