Yell Group plans £500 mln cash call

Debt-laden yellow pages publisher Yell Group plans to raise at least 500 million pounds by selling new shares, using the proceeds to repay creditors, it said on Wednesday.

Unveiling a refinancing plan that has been under discussion since June, Yell said it intended to pay off a further 300 million pounds of debt within 18 months, without specifying how the repayment would be funded.

As part of the plan, Yell will ask its lenders to extend its debt maturities to 2014 and agree to a new loan covenant.

The company, which had debt of around 4 billion pounds in June, said a significant proportion of its biggest lenders were in favour of the refinancing package.

Yell, battling an advertising slump as it negotiates a structural shift from print to online publishing, also said its current trading was in line with its previous guidance.

Yell shares closed at 74.35 pence on Tuesday, valuing the company at about 583 million pounds. The stock has more than trebled in value over the last two months on hopes the company will clinch a refinancing deal.