Shares in British telecommunications group Cable & Wireless (C&W) have lost almost half their value after news that the firm has had to secure a �1.5bn ($2.4bn) loan guarantee.

Analysts said the company was being punished for not disclosing the liability sooner and for putting its once-healthy cash balance into doubt.

The company is seeking the loan from bankers after the credit rating agency Moody's reduced C&W's status to 'junk' last week amid concerns about its rising financial obligations.

Why did C&W not tell the market about this potential liability? Charles Stanley

The downgrade, which comes as C&W struggles with a costly restructuring, triggered a clause in an agreement with German group Deutsche Telekom, forcing C&W to ring fence the �1.5bn.

Analysts criticised the company for not revealing the liability at the time of its results a month ago, and suggested chief executive Graham Wallace would now have to step down.

Tax bill

Moody's, which assesses the credit worthiness of firms, said on Friday that it was downgrading C&W by two notches to 'junk' status.

It said: "The downgrade reflects uncertainties over the timing and size of potential additional unexpected costs and/or liabilities at Cable & Wireless."

The decision forced C&W to honour a clause in its deal with Deutsche Telekom dating back to 1999, when it sold the German group 50% of its mobile operator One2One.

Four profit warnings and then this - there's no forgiveness Andrew Darley, ING Financial Markets

As part of the deal, it promised that if its credit rating fell it would set aside �1.5bn to cover any tax liabilities that could arise.

News of the clause met with harsh criticism from analysts who asked why the group had not warned investors of the clause.

"The question is: why did C&W not tell the market about this potential liability on 13 November, when it published its interim results and announced the outcome of its strategic review?," said analysts at Charles Stanley.

The news unnerved investors, sending the company's shares down 43% to 47.75p by the end of Monday.

The falls are the latest knock to the company's market value; a year ago shares were worth more than 300 pence.

Meeting obligations

C&W insisted on Friday that it could meet long-term financial obligations.

It questions the competence of management Andrew Darley

The company said it had about �2.2bn in cash as of 30 September, and investments worth �470m.

But analysts have questioned the claims.

Andrew Darley at ING Financial Markets told BBC News Online that the company had already announced costs of �200m for closing some US operations and a further �800m for restructuring.

He said that meant, when taking out the further �1.5bn liability, "they've suddenly got net debt".

But Mr Darley added that it was not simply cash concerns that were rocking the company's stock and suggested chief executive Graham Wallace would be forced to resign.

"It questions the competence of management.

"It's not a case of will he go, but when."

Added woes

Cable & Wireless is already hunting for a new chairman after the unexpected withdrawal last month of David Nash, the man who had been chosen for the role.

The telecoms group is also in the midst of a major restructuring, including plans to cut 3,500 jobs and close 23 of its 42 data centres around the world.

Despite its attempts to restore confidence, its shares are now worth only a fraction of their peak of more than �15 in March 2000 after a series of reduced revenue forecasts and job cuts.

"Four profit warnings and then this - there's no forgiveness," said Mr Darley.