The company, which publishes 300 local titles as well as printing some 1m copies of The Sun newspaper every day, has issued 320m new shares at a discounted value, in order to inject much needed new funding into its business.

According to a statement released by the group, the new shares have raised £212.3m.

However, the move has seen the Johnston family lose its place as the major shareholder for the first time. Malaysian company Usaha Tegas, led by the country's second richest man Ananda Krishnan, is to buy a 10% stake from the Johnston family and acquire another 10% directly from the company.

The Johnston family will be left with just an 8% stake, while Tegas will be the largest single shareholder.

Tim Bowdler, chief executive at Johnston Press, said: "I warmly welcome the strategic investment by Usaha Tegas in Johnston Press and, together with the proceeds of the rights issue, believe that this positions the business more strongly in the continued development of its market leading community media franchises."

The company has seen its major revenue streams, predominantly advertising, decrease and said it believes current credit market conditions suggest a recapitalisation is the best option going forward.

Usaha Tegas bought 32m shares from the Johnston family, which previously owned 56.3m. The shares were sold at a discounted 53p – a 61% saving.