Australian entertainment conglomerate Village Roadshow Ltd (VRL) is expected to raise more than $222.5m (A$400m) from the partial float of its Austereo radio division, part of which will be used to reduce its $406m (A$730m) on and off balance sheet debt.

VRL will retain a controlling interest of at least 55% of the network, which has more than half all Australia's under-40 listeners and commands about half the total metropolitan advertising spend.

A maximum of 191.4 million shares will be offered to existing shareholders, Austereo employees, institutional investors worldwide and retail clients of the lead managers Merrill Lynch, Credit Suisse First Boston and Macquarie Equity and the co-lead managers Salomon Smith Barney and CIBC World Capital Markets. It is expected that Austereo will list on the Australian Stock Exchange in March and the market capitalisation could be as high as $556m (A$1bn).

At the media conference announcing the float, chair John Kirby said that none of the funds would be used to expand VRL's cinema interests and denied that the move was a step towards the privatisation of the company. He told shareholders in November that the exhibition division was to blame for recent unsatisfactory profits and the planned reduction of the worldwide cinema circuit from 18 to eight or 10 countries would improve the situation.