The Reading-headquartered company has been in discussions with its lenders since June and, this morning, unveiled its plans to address its debts.

Aside from the rights issues, the group has requested new loan covenants and an extension of debt maturities to 2014.

The company said that it would reduce its senior debt by a further £300m within 18 months by way of a receivables securitisation, high-yield bonds, larger equity issues, "or other means".

Chief executive John Condron said that the group had so far made "good and constructive progress in a consensual process comprehensively to refinance the group".

The group has struggled to fight off the challenge posed by online directories in recent years. In May, it announced EBIT for the previous financial year of £713.1m on a turnover of £2.4bn.

However, massive writedowns of goodwill, in particular a £1.3bn hit associated with its Spanish language division Yell Publicidad, resulted in a loss of £1.1bn for the year.

It share price, which at the start of 2007 was trading at above 800p a share, fell 12% to 65p in early trading this morning.