De La Rue warned of "significant doubt" that it can continue as a going concern on Tuesday, knocking around 40 million pounds off the market value of the British banknote printer, which scrapped its dividend to tackle mounting debts.
The warning by De La Rue follows a series of setbacks, including two profit warnings, an investigation into suspected corruption in South Sudan and the loss of a 400 million pound contract for Britain's new passports.
"We have concluded there is a material uncertainty that casts significant doubt on the Group's ability to continue as a going concern," De La Rue said in a statement, adding that it was focused on delivering a turnaround plan.
De La Rue, which appointed Clive Vacher as its chief executive last month, said it would conduct a review of its business that will speed up its restructuring plan to reduce overhead costs and focus on inventory management.
Its shares were down more than 22% to 136.4 pence at 0920 GMT.
The company said its directors had considered a number of factors in reaching the going concern conclusion, including its trading results in the first six months and its impact on future performance, as well as its access to credit.
De La Rue, which produces passports for 40 countries, said its net debt had risen by more than 58% to 170.7 million pounds as its banknote printing struggles with depressed margins amid stiff competition and growing popularity of digital payments.
The company posted a half-yearly operating loss of 9.2 million pounds, compared with a profit of 10.1 million pounds a year earlier, chiefly due to restructuring charges.
Although its adjusted operating profit plunged 87% to 2.2 million pounds for the six months ended Sept. 29, De La Rue forecast it would fare better in the second half as it expects more favorable currency volumes and benefits from cost cuts.
De La Rue expects annual adjusted profit between 20 million pounds ($25.66 million) and 25 million pounds.