Metro International said it allowed the potential acquirer to perform limited due diligence after receiving an approach on February 23, but "it has been unable to present a fully financed offer and discussions have therefore been terminated".
Metro is going ahead with plans for raise new financing by issuing debt and share warrants.
The company's search for cash was punctuated by a gruelling quarter, in which revenues fell 24% to €55.6m and its post-tax losses widened from €6.4m to €15.3m.
Despite an extensive cost-cutting programme including the closure of its operations in Spain, the company was not able to reduce its expenditure by as much as the fall in revenues.
Costs were reduced by 14% or €6.3m.
Per Mikael Jensen, president and chief executive, said: "Metro International's outlook for the global advertising markets remains gloomy, regardless of the category and the visibility is very short."
Adding that he expects an April sales decline of 15%-20%, Jensen said: "We are ready to take the necessary steps required to balance this drop in revenues with significant cost reductions for the rest of the year and the years to come."
Metro International publishes in more than 100 major cities in 18 countries across Europe, Asia, North and South America.
It launched a Moscow edition on March 2 with an initial circulation of 500,000 copies.