APN NEWS & MEDIA'S independent directors are now in an untenable position after the media group's biggest shareholders defeated plans on Sunday evening for a capital raising to pay down debt.
The six directors, led by the chairman, Peter Hunt, are expected to decide their future this week.
The embattled media group went into a trading halt on Friday after reports emerged that APN's largest shareholder, Independent News & Media, and its billionaire backer Denis O'Brien, had "lost confidence" in APN chief executive Brett Chenoweth, who was proposing a capital raising to pay down debt.
APN said the non-INM directors on APN's board unanimously supported Mr Chenoweth as chief and the plans to reportedly raise $100 million.
The financially challenged INM is not expected to be in a position to participate in the raising and would face a significant dilution of its stake in APN, according to a report in Britain's Sunday Times.
Allan Gray, which owns 19.8 per cent of APN, has sided with INM and the two parties have formally requested an extraordinary general meeting to remove Mr Chenoweth as CEO and spill the board. This is expected to result in the removal of the independent directors.
The board reconvenes this morning and needs to sign APN's financial accounts before announcing its financial results on Thursday.