APN News & Media went into a trading halt this morning, pending it raising a minimum of $79 million and up to $99 million from a share issue.

“APN wishes the trading halt to last from today until commencement of normal trading on Thursday, 21 May 2009 unless APN requests the trading halt to be lifted before that time,” the company told the ASX.

APN also scrapped the interim dividend that was expected for the 2009 financial year as part of savings directed towards debt reduction. “Dividend policy for subsequent periods will reflect appropriate conservatism in line with prevailing economic conditions,” APN said in a second statement this morning.

It had paid an interim dividend of 10.5 cents a share for the first half of 2008. The equity raising comprises a one for five accelerated non-renounceable pro-rate entitlement offer at $1 per share, an 8% discount to Monday’s closing price of $1.19. The institutional component, representing about $79 million, is fully underwritten. The remaining $20 million of shares will be offered to retail shareholders.

It follows Fairfax among media groups which have raised capital to repay debt and keep the banks at bay.

The company said that with the inclusion of the new $54 million, five year CBA asset finance facility and the underwritten portion of the Entitlement Offer, “the company will have in excess of A$200 million in unused debt commitments available to be drawn, providing ample financing headroom in relation to debt maturities.”

It said its controlling shareholder, Independent News & Media, will not be participating in the Entitlement Offer. That will see its 39% stake reduced. APN’s statement followed one from Independent News & Media overnight that it had been granted a six week standstill period by its creditors, and given 15 million euros in extra working capital. That’s the first indication from INM how just how desperate its financial position is.

The extra working capital will be secured over unnamed assets (are there any left in INM?). INM had been unable top pay a 200 million euro loan which was due to be either repaid yesterday, or rolled over. The creditors owed the money could not agree on what to do, but gave INM the extra six weeks.

That is similar to the extensions currently being given to Canwest of Canada by its creditor banks and noteholders. Another deadline for the last extension falls tomorrow afternoon, Australian time. Canwest controls the Ten Network in Australia, INM controls APN with a 39% stake which it couldn’t sell late last year to raise more capital. Earlier this month, APN cut its annual earnings guidance because of the advertising slump and said Independent News remained a long-term committed major shareholder. There was some talk among analysts over whether APN should have raised capital when issuing the downgrade at the AGM.