There was more bad news for the troubled Swissair Group on Friday as shares in the company plunged on the back of a critical financial report from the bank, ABN Amro.
Shares in the company fell 10 per cent at one stage to around SFr127 ($71) before recovering some ground to close at SFr134.25 ($74.95).
However, the shares were still 5.3 per cent below the Thursday close of SFr141.75 ($79.10).
ABN Amro's report continued to advise investors to sell the group's stock and said the company's share price was over-valued. It revised its six-month price target for Swissair shares to just SFr70.
"We expect no improvement in the underlying results of the Swissair Group in 2001," said the report. "Normalised losses are expected to be SFr688 million.
"The sluggish global economy and the weak competitive position of the various airline businesses are offsetting restructuring efforts."
Fears that the company's French affiliate, Air Liberté, may have to file for bankruptcy is also weighing on the share price.
The Swissair Group has had little to smile about since posting losses of almost SFr3 billion for the year 2000. Under the leadership of its chairman, Mario Corti, it has now embarked on a major reorganisation programme including a withdrawal from foreign investments.
However, ABN Amro's report is sceptical about the ability of the new management team to turn the group around.
"The market seems to be assuming that the new management will rapidly turn around the core airline. Given its marginal competitive position and the weak economic background, we believe this is highly optimistic."
swissinfo with agencies
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