Johnston Press, publisher of regional newspapers ranging from the Yorkshire Post to the Worthing Herald, stunned investors with a £212 million fund-raising today - most of it through a rights issue.

The group said advertising revenues had fallen sharply in recent weeks, and without the share issue it could have been in real danger of breaking the covenants on its bank loans.

The emergency rights issue will be accompanied by a placing of new shares and the sale of exitsing shares to Malaysian media business Usaha Tegas. This is one of the operating businesses of Tamil billionaire Ananda Krishna who has interests stretching across media and telecoms.

Johnston chief executive Tim Bowdler said the company had looked at a whole range of alternatives to today's issue but they were "not deemed to be appropriate or sufficient in the current circumstances".

Johnston said advertising revenues had slumped in recent weeks with property ad revenues down 12.1% and motor ads down 16.4%. Circulation revenues were flat.

The new shares are being offered on a one-for-one basis at 53p, a 61% discount to last night's closing price. The issue has been fully underwritten by investment bank Deutsche.

The shares fell 18p to 117¾p.