The company is trying to raise EUR 10 million through the sale of a 20 per cent stake in the business.

The company, which has a number of papers, claims it does not require the new investment to remain viable. It was established in 2005 by Padraig O'Dwyer, Tim Collins and the Irish News.

Mr. Collins is a former Government adviser, barrister and public affairs consultant. Mr. O'Dwyer who claims to be a founder of Highland Radio in Donegal and was a founder of Northern Media Group, which operates six radio stations in the North with the former deputy leader of the Ulster Unionist Party John Taylor.

A confidential circular for potential investors – according to The Irish Times - indicated that River Media incurred an after-tax loss of EUR 5.87 million last year.

Mr Collins told the Irish Times that he expects the company to break even early next year. The circular indicates that the EUR 10 million being sought includes EUR 4.7 million for the paydown of bank debt, EUR 3.3 million for payment of a printing liability and shareholder loans and EUR 2 million for working capital.

Mr Collins said 2007 was a year in which the company made a particularly heavy investment in its business and had significant borrowing as a result of that.

"We believe the time is right and [that] it is prudent to seek to reduce debt and improve the level of cash on our balance sheet. However, the company does not require this new investment in order to remain viable.”

The Dublin newspaper reported that while the company is seeking the cash investor it is also considering "other investment options.”

The massive losses come just weeks after the company’s Production Director was granted a High Court injunction in Dublin preventing the company from making him redundant. The employee complained that his duties included delivering newspapers and collecting debts.

Last month some of the Donegal titles were forced by the Audit Bureau of Circulation to correct misleading circulation figures.

And in recent weeks the Editors of a number of titles including the Inish Times left the company.