Shares in Yell tumbled a further 10 per cent today after it was forced to set a fresh deadline of Wednesday to meet an agreement with its lenders or face asking the courts to push through a rescue restructuring.

The Yellow Pages group, which is saddled with a £3.8 billion debt mountain, confirmed that it had agreed with its 200-plus lenders a fresh three-day deadline to agree a new deal.

It needs 95 per cent of the group to back the pacakage.

In a statement it said: "On 19 October Yell Group announced that it had extended the deadline for its lenders to respond to its refinancing proposals to 5pm on Monday 26 October.

"Yell today announces it has given a further short extension of the deadline until 5pm on Wednesday 28 October."

Shares in Yell closed down more than 10 per cent yesterday after news leaked into the market that the group and its lenders had failed to reach a deal ahead of yesterday's deadline.

Today's statement saw them plummet a further 5.68p to 46.32p.

If the directories group, which is advised by Deutsche Bank and JP Morgan Cazenove, fails to secure a deal, it will push ahead with a back-up plan to approve a scheme of arrangement to restructure its £3.8 billion debt pile.

The media group, which has been hit by a slump in advertising and fierce competition, is asking lenders to give it longer to pay down the bulk of its debt in return for paying off £800 million within 18 months.

The restructuring would enable it to pay up to an extra 1 per cent of interest on its bank debt. In return for that the banks would extend the period of its outstanding loans to 2014.

The group plans a rescue rights issue to raise £500 million from investors to fund the payment. The other £300 million of debt would be refinanced in order to pay off existing lenders.

However, its plummeting share price will make it more difficult to raise fresh finance so it needs to act quickly.

Yell racked up its borrowings after acquisitions in Spain and the US. It has been negotiating the terms of its debt with its banks since June.

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