Media Square, the marketing services group chaired by former Johnston Press chairman Roger Parry, has suspended trading on the stockmarket after failing to negotiate urgent funds from its bank.

Media Square, which late last month issued a profit warning, said it had requested that its shares on London's AIM market be suspended "pending further clarification of its financial position".

The company said it has been operating with "limited headroom" against its banking facilities and needed additional funds to get it through a seasonal peak.

At the start of December the company – which has been hit by a £100,000 bad debt after the collapse of US brokerage client MF Global – entered negotiations for bank funding and "certain revisions to its existing covenant regime".

"The company's bank has now informed the board that it cannot commit to amending the company's banking covenants, and furthermore will not extend the facilities available to the company at this stage," said Media Square. "As a result of the uncertainty surrounding the company's banking facilities, the company has requested that its shares are suspended pending further clarification of its financial position."

Last month, Media Square launched legal action against David Wright, the founder of financial PR empire Citigate, seeking almost £1m in damages over an alleged "conspiracy" to take over the company.

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