Private equity fund Oakley Capital Investments (OCI) has committed £3m to an £8m fund raise by Time Out Group (TMO) after the £43m listings and events group suffered a slump in media revenues caused by the growing use by consumers of AI and social media.

OCI, a £937m investment company that invests in the private equity funds of Oakley Capital, owns 38% of Time Out Group and said its support reflected the size of its stake.

It will buy just over 38m of new shares that TMO is issuing at 8p, a 30.4% discount to last night’s 11.5p closing price.

Oakley Capital, the private equity group founded by Peter Dubens to focus on European media, consumer and technology businesses, will buy 4.4m shares, at a cost of around £350,000.

It will also buy any shares not taken up by other investors in the conditional part of the accelerated placing. This section of the fund raise is looking to sell 64.3m shares, 36m of which are being bought by OCI, Oakley Capital and fellow institutional investor Lombard Odier.

OCI is also extending its £8m loan to TMO by 12 months to June 2027, lifting the interest rate from 8% to 12% above SONIA.

A debt for equity swap will see Oakley Capital convert its recent £5m loan into more shares in TMO at the placing price.

OCI said its independent directors had agreed to support the financing to maximise the value in TMO. It said the £3m represented just 0.2% of its £1.2bn portfolio.

Time Out needs the money to plug a gap in working capital as it pays one-off restructuring costs and to provide investment for a potential new London market and to speed up adoption of new technology.

The placing came as annual results showed the media and hospitality group’s operating losses jumped to £49.7m from £0.4m in the year to 30 June as it wrote down its market and media assets by £35.1m and incurred £9.2m of exceptional costs.

Adjusted profits fell to £7.1m from £12m. The media part of the business suffered most, falling from a £5.3m underlying profit to a £1.1m loss, while the markets division saw its profits fall to £10.7m from £12m.

Chief executive Chris Ohlund said after three consecutive years of improving profitability, the media industry had experienced a number of challenges that reduced profits.

“We have taken decisive action and as a result have seen a material improvement in performance since the financial year end. The changes will result in a stronger and more focused business, positioning Time Out for a return to profitable growth,” he said.

In early trading, TMO shares fell 2.6p, or nearly 23%, to 8.9p, just above the price of the share placing that is also open to private investors through the RetailBook platform. The stock has never recovered from the 2020 pandemic when it previously stood at 121p.

OCI is one of the best-performing London-listed private equity funds, providing shareholders with a 115% total return over five years.