Publisher Reed Elsevier today launched a major share placing to cut its $8.3 billion (£5 billion) debts.

The Anglo-Dutch firm is selling 109 million shares in London and 63 million in Amsterdam — a huge 9.9% of shares currently in issue.

The placing, handled by JP Morgan Cazenove and UBS, sent shares tumbling 74¼p to 406¼p in early trading in London.

Ian Smith, Reed's chief executive, said “the current level of debt is too high” and that it needed to be cut to maintain the firm's credit rating.

It came as Reed, which produces business and science publications such as The Lancet, New Scientist and Farmers Weekly, reported a 5% rise in profits to £782 million for the first half of the year. Revenues were up 3% to £3.06 billion.

“The depth and length of the downturn is having some effect on even our most resilient businesses,” said Smith. “The downturn over the last year has been severe and unprecedented.”

The firm warned its results for the full year will be hit by the downturn in advertising and promotions.

Reed's debts rose after it embarked on a series of acquisitions, including last year's $4.1 billion purchase of Choicepoint, which provides services to the insurance industry.

The firm planned to sell its trade magazine arm Reed Business Information (RBI) but abandoned the move in December amid deteriorating trading conditions and a sharp reduction in its value from £1.3 billion to £650 million.

“Last year's acquisition of Choicepoint and the terminated sale of RBI have given us more debt than is prudent in currency economic conditions,” said Smith.