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Independent News & Media (INM) saw a 10% drop in operating profits last year and warned they could fall by as much as another 30% this year after what it called a "tougher than expected first quarter".
The media group said "there is now strong likelihood" it will breach its banking covenants in 2009 if it cannot reach a deal with lenders.
INM has a €200 million (£179.9 million) bond which matures on 18 May which it said it cannot currently afford to repay.
Bankers Rothschild and Irish brokers Davy have been brought in to try and strike a deal between the company, its bondholders and its two largest shareholders Sir Anthony O'Reilly and Denis O'Brien. They are reported to be prepared to inject another €30 million into the business.
INM also took a €373 million hit on exceptional charges mainly from a €290 million writedown on the values of its newspaper titles which include The Independent and Independent on Sunday.
Revenues fell 2.6% to €1.47 billion in 2008 with pre-tax profits down 26% at €212 million.
