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(Reuters) - Quindell Plc, a British IT outsourcing and consultancy services provider, said it was restructuring certain contracts without any impact to its profit forecast, allaying fears that one of its key contracts had run into trouble.
The company's shares were down 3 percent at 13:47 PM BST, with more than 16.6 million shares being traded. The stock had fallen as much as 18.3 percent earlier in the session.
Quindell's shares have fallen 17 percent in past two days since a Financial Times report said Quindell's joint venture contract, one of the company's largest, with UK road assistance firm RAC to install telematics devices in vehicles has run into problems. (http://on.ft.com/1qKC9zR)
"Certain contracts (are) being restructured to ensure the optimum return on cash resources but both profit and cash guidance are not dependent on any upside from these initiatives," Quindell said in a statement on Wednesday.
When contacted by Reuters, Quindell did not immediately clarify if the contracts were related to its joint venture with RAC. RAC declined to comment.
However, Quindell also said in the statement that "all core business relationships remained strong".
The company has not fallen out with the RAC, a spokesperson had told Reuters in an emailed statement on Aug 4, a day after the FT report.
The AIM-listed stock has taken a beating since April, when short-seller Gotham City Research questioned Quindell's revenue model and profit quality.
Quindell's shares were trading down 2.9 percent at 166.6 pence at 13:47 PM BST on the London Stock Exchange.
(Reporting by Noor Zainab Hussain in Bangalore; Editing by Savio D'Souza)