Shares in Interserve plunged following reports that the outsourcing giant had been placed under the watch of the UK government amid fears for its financial health following the collapse of Carillion, but later made back much of the losses.
The group, which has revenues of around £3 billion and employs 80,000 staff worldwide, was down over 14% in earlier trade on the London Stock Exchange, before recovering close just under half a percent lower.
The Financial Times today said that UK ministers are "very worried" about contractor Interserve and have set up a team of officials to monitor the company, following the collapse of competitor Carillion.
The newspaper said that UK civil servants had monitored Interserve since a profit warning in September due to concerns over its financial health, citing government advisers and officials.
Interserve declined to comment on the report.
"We monitor the financial health of all of our strategic suppliers, including Interserve. We are in regular discussions with all these companies regarding their financial position," a spokeswoman for the UK Cabinet Office said.
"We do not believe that any of our strategic suppliers are in a comparable position to Carillion," she added.
UK construction and services company Carillion, which is involved in six projects in Ireland, collapsed on Monday after banks refused to lend it any more money.
The move threw hundreds of major projects in doubt and brought down one of the UK government's most important suppliers.
Carillion was forced into compulsory liquidation after costly contract delays and a downturn in new business.
This prompted a string of profit warnings and a first-half loss of more than £1 billion.
Interserve provides services to multiple areas include aviation and defence, highways, transport, energy and utilities, industrial, nuclear, science and technology, pharmaceutical and health and social care.
One of Interserve's subsidiaries is RMD Kwikform, which has operations in Dublin.
Interserve warned of lower annual earnings in September, sending shares crashing by more than 50%.
It cost more that anticipated for the firm to exit from the waste-to-energy business, while its construction and services traded below expectations last summer.
However, a week ago Interserve said that 2018 operating profit would be ahead of forecasts, sending shares to their highest since the September profit warning.
