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Shares in structural steel group Severfield-Rowen plummeted on Wednesday after the company announced that its Chief Executive Officer had stepped down following cost over-runs on a key London contract which had adversely impacted its UK business performance.In a trading update, the company said that its UK businesses had been operating in a "difficult climate" with pricing pressures and protraction of contractual settlements "posing significant challenges" to it.The particular contract in London which had incurred cost overruns relates to the building located at 122 Leadenhall informally known as the Cheese Grater for its distinctive shape. The group stated that a board decision had been taken to change the leadership so as to re-establish confidence with shareholders. Accordingly, it said that Tom Haughey had stepped down from the helm with immediate effect and been replaced by John Dodds, Chairman of the company, pending the appointment of a new Chief Executive.Funding questionsThe group added that it was currently in discussions with its lending banks "regarding compliance with its covenants".It added: "The discussions with the company's lending banks, and its other stakeholders, will continue with the objective of placing the group on sound financial foundations that suport its UK business and the further development of its Indian joint venture."John Dodds, Executive Chairman of Severfield Rowen, commented on the state of the company, lamenting the need to deliver today's announcement."Severfield-Rowen is the UK's market leader in structural steel and the development of its Indian activities is encouraging. Our order book remains stable, despite challenging current conditions and the board is confident that the longer-term fundamentals of the group are strong.""I am, however, extremely disappointed in the need to make this latest trading update. My task now is to re-establish the credibility of the group with all its stakeholders, bring greater control and discipline to its operations and secure Severfield-Rowen's longer term funding."As of December 31st, the group's net borrowings stood at £30m with the order book standing at £209m.Analysts' viewsAndy Douglas, an equity analyst at Jefferies International, gave the company a "hold" rating and commented on the results pointing to the questions that would be asked regarding the company's banking covenants."Management reports that, as at December 31st 2012, net debt is expected to be approximately £30m and that the group is 'in discussions with its lending banks regarding compliance with its covenants', which is clearly a major concern given the likelihood of the group reporting an operating loss in the fiscal year 2012."He added: "Given management's comments in this update, there is clearly considerable uncertainty over the group's fiscal year 2012 results and clearly this also makes for tough negotiations with the group's stakeholders.To rectify the high level of uncertainty, Douglas said "management needs to quickly update the market on its fiscal year 2012 results or contract review. Only then can it begin to attempt to build credibility with investors."Meanwhile Michael O'Brien, an analyst at Cannacord Genuity, recommended a "sell" rating as he commented on the issue of Severfield-Rowen's covenants with banks."Severfield has not yet breached covenants but this clearly will come under greater threat once the 122 Leadnhall losses are absorbed," he said.He said Cannacord Genuity believed that Severfield-Rowen's 122 Leadenhall contract "has a value of tens of millions".He added: "We believe a current year impact of approximately £10m may not be unreasonable, implying a loss of approximately £8m for the fiscal year 2012/2013."