Shares in the troubled aviation conglomerate, SAirGroup, slumped by more than 11 per cent on Monday as the markets gave their verdict on Friday's mass resignation of the board of directors.
The share price went into a tailspin as rumours mounted that the company's financial position is even worse than expected.
SAirGroup's shares have fallen by more than a quarter in the past month, and are down by over 40 per cent from last year's high.
The group is due to decide on Monday whether to end speculation by releasing its annual results earlier than anticipated. At the moment, the results conference is scheduled for April 2.
Analysts say SAirGroup needs a SFr1 billion credit injection to avoid bankruptcy. On Sunday, the SonntagsZeitung newspaper, said the company had made a SFr2.5 billion loss in the past year, and is currently losing SFr7 million a day.
The board on Friday decided to take collective responsibility for the group's troubles by announcing its intention to resign. Five board members will step down at the Annual General Meeting on April 25, while four others, including the outgoing chairman, Eric Honegger, will leave by spring 2002.
The board is also to be slimmed down to seven members - three of whom will be appointed in April.
Speculation is now mounting as to who will succeed Honegger. Mario Corti, the only board member not to step down, is being touted as the most likely candidate.
He is currently financial director of the Swiss food giant, Nestlé, and has held top positions at Switzerland's National Bank and the federal office for foreign trade.
It is not clear why Corti did not resign with the rest of the board last Friday.
Other potential successors to Honegger have been named as André Kudelski - a board member of the Kudelski Group, which specialises in digital technologies - and Armin Meyer, head of the Swiss chemicals group, Ciba.
Analysts say the company's next move is likely to be a link-up with a major international airline alliance, such as the "OneWorld" grouping, led by British Airways and American Airlines.
Adding to SAirGroup's financial woes is the news that a law firm, based in Winterthur, may file liability suits against members of the outgoing board, in a bid to protect shareholders' interests.
The SonntagsZeitung said that the legal firm, Hans-Jacob Heitz, has started investigating whether shareholders were sufficiently informed of risks taken by SAirGroup when it acquired stakes in several mainly loss-making airlines abroad.
So far, the government, which holds a three per cent stake in SAirGroup, says it has no plans to intervene.
The board's decision to step down is the latest in a series of high-profile departures at the troubled group, which in January called a halt to its strategy of expansion, following mounting losses among many of its affiliates, including Belgium's Sabena.
The newly-appointed head of the airline division, Moritz Suter, resigned unexpectedly last Wednesday after just 44 days on the job. Differences with the board over structure and his failure to get his own way over decision-making were cited as reasons for his premature departure.
Suter was drafted in to take charge of Swissair, Crossair and Sabena, as well as a string of stakes in other European airlines.
His appointment came in the wake of the resignation of chief executive, Philippe Bruggisser, who left the company in January after his policy of buying into foreign airlines and other ventures was deemed too costly and unsuccessful.
Bruggisser's departure was followed shortly afterwards by that of Paul Reutlinger, head of the group's French interests, which include stakes in three loss-making regional airlines.
swissinfo with agencies