{"id":161229,"date":"2019-04-09T13:54:57","date_gmt":"2019-04-09T13:54:57","guid":{"rendered":"https:\/\/www.theindustry.fashion\/debenhams-falls-into-the-hands-of-its-lenders\/"},"modified":"2021-08-12T13:55:50","modified_gmt":"2021-08-12T13:55:50","slug":"debenhams-falls-into-the-hands-of-its-lenders","status":"publish","type":"post","link":"https:\/\/www.theindustry.fashion\/debenhams-falls-into-the-hands-of-its-lenders\/","title":{"rendered":"Debenhams falls into the hands of its lenders"},"content":{"rendered":"<p>Lenders have seized control of Debenhams after the company was placed into administration.\u00a0The move <strong>wipes out the stake held by Sports Direct<\/strong> tycoon Mike Ashley in the business, and those of all other shareholders.<\/p>\n<p><!--more-->It also cancels plans for an emergency shareholder meeting in which <strong>Ashley was to seek his appointment to the board<\/strong> and attempt to oust most other directors.<\/p>\n<p>Administrators at <strong>FTI Consulting were appointed to the retailer<\/strong> at just before 10am on Tuesday and immediately sold the group\u2019s operating companies to a new entity owned by its lenders.<\/p>\n<p>The process does not affect the retailer\u2019s pension scheme, suppliers, landlords or its immediate trading plans.<\/p>\n<p>Chairman Terry Duddy said: \u201cIt is <strong>disappointing to reach a conclusion that will result in no value for our equity holders<\/strong>.<\/p>\n<p>\u201cHowever, this transaction will <strong>allow Debenhams to continue trading as normal<\/strong>; access the funding we need; and proceed with executing our turnaround plans, whilst deleveraging the group\u2019s balance sheet.<\/p>\n<p>\u201cWe remain <strong>focused on protecting as many stores and jobs as possible<\/strong>, consistent with establishing a sustainable store portfolio in line with our previous guidance.\u201d<\/p>\n<p>Earlier in the day, Ashley\u2019s Sports Direct had made a <strong>revised \u00a3200m rescue offer for Debenhams,<\/strong> delaying the department store\u2019s administration.<\/p>\n<p>The offer involved underwriting a rights issue which would have seen existing investors buying newly-issued shares and was an <strong>advance on a \u00a3150m plan tabled on Monday<\/strong>, which was rejected.<\/p>\n<p>Under the proposal, Debenhams\u2019 lenders would have had to agree to <strong>write off \u00a382m of its \u00a3720m debt mountain<\/strong>, as well as install the tycoon as chief executive.<\/p>\n<p>Lenders to Debenhams said the proposal, on the terms set out, was \u201cnot sufficient\u201d.<\/p>\n<p>Debenhams said in a statement: \u201cThe board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of April 9, which indicated a willingness of Sports Direct to underwrite an equity issue of \u00a3200m.<\/p>\n<p>\u201cThe company\u2019s <strong>lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient<\/strong> to justify an extension to the 8 April deadline.\u201d<\/p>\n<p>The pre-pack administration undertaken by the struggling department store chain will see its debt reduced and comes ahead of a<strong> wider restructuring which will see around 50 stores closed.<\/strong><\/p>\n<p>It will also see a \u00a3200m refinancing plan, announced in March, go ahead.<\/p>\n<p>Ashley\u2019s attempts to take control of Debenhams had become increasingly desperate, and over the weekend the businessman demanded the board be investigated, <strong>two members to undergo lie detector tests<\/strong> and trading in its shares to be suspended.<\/p>\n<p>Sports Direct added on Tuesday that it is continuing to \u201cactively evaluate\u201d a conventional takeover, priced at 5p per share.<\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":42,"featured_media":133299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[10585,6,10494],"tags":[3514,11421,10836,13835],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - 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