Sport Media Group Plc, the publisher of the Daily Sport and Sunday Sport tabloid newspapers, suffered nearly a 30 per cent fall in its share price today after it emerged that it had breached one of its loan agreements.

Shares fell to 6.5p by midday after opening at 9p – a fall of 27.78 per cent.

The company said its bank had notified it of the breach on Wednesday but that it had not yet managed to agree new terms. The bank has provided a two-month extension to the company’s current facility to allow a new deal to be hammered out, the company said.

Sport Media said it is seeking to remedy the breach through further discussions with its existing finance providers and is exploring alternative methods of financing.

“The board believes that a refinancing solution will be reached within the extension period,” a spokesman for the company said, adding that it will publish a trading update tomorrow.

Last month Sport Media Group secured the employment of Lembit Opik, the Liberal Democrat MP and wooer of TV presenter Sian Lloyd and Gabriela Irimia, the Cheeky Girl, as a political columnist for the Daily Sport.

But his appointment has not prevented sales of the paper from falling. Circulation dropped below the 100,000 mark for the first time in March and now the paper sells just under 80,000 copies a day.

In May, the group bought Flip Media, the publisher of lads' magazine Front and DVD World, for £265,000, in an effort to diversify beyond tabloid newspapers.

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