Interserve shares popped higher on Friday, following days of profit warning-related losses, after it announced it had won a £227m government contract.
Coming a day after its most recent profit warning, and concerns it may breach its banking covenants, the company said on Friday it had won a new five-year facilities management contract with the UK Department of Work and Pensions.
The contract included the provision of mechanical, electrical and building maintenance services and cleaning and catering across the department's 700 properties.
On Thursday, shares in the company plunged 37% after a profit warning that Interserve related to problems with "contract performance" and changes in legislation that raised the salaries of many of its 80,000 workers - most of them minimum wage.
After the market had closed on Thursday, rumours began to run rife that the company had breached banking covenants that could have resulted in bankruptcy.
Indeed, Interserve admitted it was close: "We now believe there is a realistic prospect that we will not meet the net debt to EBITDA test contained in our financial covenants for 31 December 2017," it said late on Thursday.
On Friday, the news of the contract win and no further talk of covenant breaches helped the shares mount a decent rally. After an hour of trade in London, Interserve shares were up 12.6% at $73.63.