McColl's (MCLS.L) lost more than half of its value on Monday after it warned its ordinary shares were unlikely to benefit from a potential financing that could help it resolve short-term funding issues.
The British convenience store chain fell as much as 53% on the day in London on the back of the update, meaning the company's stock price has declined by around two-thirds since the start of 2022.
It also forecast weak annual profit following lower consumer spending over the Easter period, as well as supply chain troubles.
After reporting “mixed trading” it said it does not expect its annual adjusted core profit to exceed last year's £20m ($25.5m).
In addition to this, it said that even if it managed to attract financing that would potentially boost its short-term funding problems, it would be unlikely to add much value to its share price.
The London-listed firm expects to delay the publication of its full-year results past the end of May, the current deadline for publishing them under London Stock Exchange (LSEG.L) rules, until the financing talks are resolved.
It is still in discussions with lenders and banks to secure more funding.
Sky News reported that its partner Morrisons is considering options to deal with the financial struggles of McColl's.
The company, which operates more than 1,100 convenience stores and employs around 16,000 people, said it was in talks with its wholesale partners to mitigate the product availability issues as shortages of its key products intensified last year.
The firm received a takeover approach in February from petrol station giant EG Group, but those discussions ended.
A number of retailers are currently fighting a sharp cost of living squeeze, increased costs, and higher inflation. Earlier this month the Office for National Statistics (ONS) revealed that annual prices rose by an average of 7% in March.
Economists had predicted inflation would rise to 6.7%, up from 6.2% in February.