Debenhams remains in hands of lenders after failed sale process
Beleaguered department store chain Debenhams will remain in the hands of its lenders after a sale process ended with no acceptable bids.
The group of creditors, which took control of the retailer after it went into a so-called pre-pack administration last month, said administrators at FTI Consulting considered buyout bids to be “not at the level required to be taken forward”.
The consortium, called Celine, gave assurances that it is a “committed long-term owner” and has provided Debenhams with £200m in fresh funding.
Details were not given on the number of suitors or level of bids. But it is understood Mike Ashley’s Sports Direct, which owned a 29% stake in Debenhams, was not one of the bidders, despite having led an aggressive campaign to take control of the retailer before its pre-pack administration.
Bidders would have had to refinance the chain’s mammoth debts, which ran to more than £500m.
Stefaan Vansteenkiste, representing Celine, said: “The investor consortium is a committed long-term owner, which has provided Debenhams with £200m in fresh funding for the financial restructuring process and to fund the company’s operating turnaround.
“Within the consortium, there is extensive turnaround experience, which we will deploy to support the management’s plan and to position Debenhams for a long-term successful future.”
Debenhams will now press ahead with its plans for a company voluntary arrangement (CVA) to allow it to close 22 of its least profitable stores and slash rents on more than 100 outlets.
The plans will put 1,200 jobs at risk across the department store chain.
Creditors, including landlords, are due to vote on the CVA agreement later on Thursday with approval from 75% needed to give the plans the green light. But Sports Direct is reportedly set to vote against the deal.
Executive chairman Terry Duddy said: “I am pleased that our new owners have confirmed their commitment to Debenhams and remain supportive of our plans to restructure the business.
“We are confident that we will receive support for our CVA proposals, which make sense for all parties, and will give us the platform to deliver a turnaround.”
Debenhams’ pre-pack administration last month wiped out the stakes of all shareholders including Sports Direct.