Worries about the ability of Scotsman publisher Johnston Press to get away its multi-million fundraising caused its shares to drop further towards the price it is offering new shares.

Worries about the ability of Scotsman publisher Johnston Press to get away its multi-million fundraising caused its shares to drop further towards the price it is offering new shares.

Johnston Press, which publishes around 300 papers including the Yorkshire Post, closed down 2.9% yesterday at 66.5p, barely half the level it traded at prior to its announcement of a rights issue last month and perilously close to the issue price of 53p.

Its nil paid rights - the rights to buy the shares - after a volatile day finished down 0.5p at 15p. The company plans to raise £162m through a one-for-one rights issue of around 320m shares.

Investors have been spooked by the repricing of Bradford & Bingley's share offer last week, even though it was fully underwritten by investment banks.

Doubts were heightened by the announcement last week that several directors, including chief executive Tim Bowdler had sold some of their rights to new shares although the company said this was simply to fund the take-up of the remainder of the rights.

Johnston Press maintained yesterday that its rights issue was fully underwritten and remained on track. Analysts have also noted the potential role of Usaha Tegas, a Malaysian corporate giant, which has already agreed to spend £122m on a 20% holding in the company at an average price of 95p a share.

Landsbanki analyst Andrew Walsh suggested the company, headed by Ananda Krishnan, could yet mop up unwanted stock: "Surely such an investor prepared to buy a 20% stake at £122m would be prepared to buy up to a 10% for £43m?

"We would argue, in the absence of other circumstances, the fall in the (Johnston Press) nil paid price seems to ignore the fire power of its new strategic investor."

He also suggested that Usaha Tegas could become a bond investor too by lending it cash when its borrowing facilities come up for review next year.