Yell, the struggling directories publisher, unveiled plans for a larger-than-expected £660 million rescue rights issue as it warned that the outlook for the rest of the year remained bleak.

The group, which recently secured the green-light from lenders for a lifesaving financial restructuring, said it had secured support from shareholders to tap them for £660 million of new equity in a fully-underwritten share issue. It had been expected to raise just £500 million.

The announcement came as it unveiled results for the six months to the end of September which showed a 21 per cent year-on-year drop in earnings to £296.9 million on revenues down 13.2 per cent to £982.8 million. The figures were slightly better than expected.

However it said that trading remained tough adding that it did not "assume any significant improvement in the rate of year-on-year revenue decline for the remainder of the fiscal year, although we are seeing the rate of decline stablising."

The debt-laden group persuaded its 300 lenders last week to support a restructuring on its £3.8 billion of debt. Its borrowings will now mature in 2014.

Ninety-five per cent of lenders backed the deal but only after the deadline was extended three times in a tortuous process.

Shares in Yell, which jumped 10 per cent on the announcement, were trading down 0.35p or 0.73 per cent at 47.65p.

John Condron, chief executive, said: "While today's results continue to reflect the effects of the economic recession and reduction in confidence among businesses across all sectors they also show the comparative strength of Yell's trading position."

The group plans to issue 1.6 billion shares at 42p each, a 12.5 per cent discount to Monday's closing price. The move will triple the number of Yell shares in issue.

Half will be sold through a placing to agreed buyers and half through an open offer.

The fund-raising will fetch a net £574 million after expenses to help it pay down its huge debt pile.

Yell joins a growing list of companies including National Express and Laird, the electronics group, which have announced in recent weeks plans to issue shares to cut their debts.

The media group racked up its borrowings after acquisitions in Spain and the US and has been negotiating the terms of its debt with its banks, including HSBC, since June.

Last week Yell's French peer, PagesJaunes, said it expected sales momentum in the fourth quarter to deteriorate.

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