The company, which reported a net loss of 9.7 million dollars in the fourth quarter of 2008 owing to the global economic crisis and its impact on the advertising market, said it needed fresh funds to continue operations.
By not reaching a break-even operating result for 2008, Metro violated the terms of its “multi-currency revolving credit facility”, it said.
“This has triggered the requirement to repay the outstanding credit facility of 28.7 million euros. Further, the board of directors assesses that Metro does not have sufficient working capital for the next 12 month period,” it said in a statement.
The money raised by the share issue would be used to pay off the credit facility and improve the company’s liquidity, it said.
Metro said it had taken several important decisions in 2009 aimed at improving profitability.
In January, Metro decided to close its Spanish operations.
It also announced on Monday that it had signed an agreement regarding the divestment of its operations in New York, Philadelphia and the 51 percent of the Boston operation owned by Metro International.
The buyer is Seabay Media, a company formed and controlled by former Metro chief executive Pelle Törnberg.
The financial details of the deal were not disclosed.
The three operations in the US will continue as franchises under a new ownership. The majority of Metro’s functions, including the headquarters, will be moved from London to Stockholm, it said.
“These measures are expected to have a significant impact on Metro’s profitability, since these operations have historically accounted for a considerable part of Metro’s costs and losses,” it said.
The subscription period for the share issue will run from May 22 to June 4.
Metro announced on April 20 that its net loss deepened in the first quarter to $20 million and said that discussions with a potential buyer for the group had been abandoned.