Talk about wishful thinking. Shares of TomTom jumped a fifth on Friday amid a rumour that Apple, the US computer group, was eyeing a stake in the struggling maker of mobile satellite navigation units. Investors soon learnt the truth: not only was the rumour nonsense, but shareholders are being asked to fork out more than €359m through a rights issue to ease the company’s heaving debt load. Three investors will contribute another €71m through a private placement. The shares fell 11 per cent at one point on Monday.

TomTom’s is a familiar story of bad timing and over-reach. The Dutch group last year took on €1.6bn of debt to fund its €2.9bn acquisition of Tele Atlas, a maker of mapping software, after a bidding war with Garmin, its US rival. Tying Tele Atlas’s maps to TomTom’s gadgets looked promising, but by the time the deal completed last year, the financial sector was on the verge of implosion. This year, the recession’s hit to sales and profits left TomTom in danger of breaching covenants on €1.2bn of net borrowings.