Debt-laden newspaper publisher Johnston Press has suffered a fresh blow as it had to give up more of its shares to its banks in return for a crucial £393m refinancing deal.
The lenders, led by Royal Bank of Scotland and Lloyds, will now have the right to own 12.5 per cent of Johnston's equity through warrants, by converting debt for equity at a later date.
Under the deal, Johnston's chief executive, Ashley Highfield, is giving the banks a further 7.5 per cent – on top of the 5 per cent stake they previously agreed in 2009. The group also had to pay £11.5m in fees.
Mr Highfield said that the deal showed the banks "believe in the future of the company".
But it is just the latest blow in the history of the once mighty giant of regional newspapers, which also carried out a £212m rights issue in 2008.
Johnston's stock market value has crashed more than 95 per cent since before the credit crunch, to just £36m. Net debt is almost 10 times larger,at £352m.
Mr Highfield was speaking as Johnston, owner of The Yorkshire Post and The Scotsman, slumped to a £144m annual pre-tax loss, after it took a £164m writedown on the value of its print newspapers.
While the group was in the black on an underlying basis, profits before exceptionals fell 10 per cent.
Digital revenues grew by just 0.7 per cent last year to £18m, representing 5 per cent of its £374m turnover, which still comes chiefly from print.
Mr Highfield announced earlier this month that he wanted to turn some print titles from daily to weekly and invest instead in websites and apps.
The group axed around 600 employees last year as it slashed headcount by 11 per cent to just over 5,200, and Mr Highfield warned "further efficiency measures are now under way".
The Johnston boss insisted his "platform-neutral" strategy of "local, social and mobile" made sense, saying he has received "hundreds and hundreds of emails" in support from staff.
An iPad edition of The Scotsman has been downloaded more than 10,000 times and he has just launched 10 free football smartphone apps for local areas.