{"id":161233,"date":"2019-04-09T20:41:40","date_gmt":"2019-04-09T20:41:40","guid":{"rendered":"https:\/\/www.theindustry.fashion\/mike-ashley-slams-debenhams-administration-as-national-scandal\/"},"modified":"2021-08-12T13:55:50","modified_gmt":"2021-08-12T13:55:50","slug":"mike-ashley-slams-debenhams-administration-as-national-scandal","status":"publish","type":"post","link":"https:\/\/www.theindustry.fashion\/mike-ashley-slams-debenhams-administration-as-national-scandal\/","title":{"rendered":"Mike Ashley slams Debenhams administration as \"national scandal\""},"content":{"rendered":"

Mike Ashley has called the administration of Debenhams a \u201cnational scandal\u201d<\/strong> and called for the process to be reversed after the retailer\u2019s lenders seized control.<\/p>\n

The so-called pre-pack administration wipes out the stakes held by Sports Direct and all other shareholders.<\/p>\n

<\/p>\n

It also cancels plans for an emergency shareholder meeting<\/strong> in which Ashley was to seek his appointment to the board and attempt to oust most other directors.<\/p>\n

In a statement issued to the market on Tuesday afternoon, Ashley said the administration should be reversed<\/strong> and Sports Direct given access to information to \u201csave the business for all stakeholders\u201d.<\/p>\n

He also slammed the authorities and the retailer\u2019s advisers.\u00a0\u201cThese politicians and regulators have proven to be as effective as a chocolate teapot<\/strong>,\u201d he said.<\/p>\n

\u201cI restate my call for the advisers to go to prison<\/strong> given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.\u201d<\/p>\n

\"Mike

Mike Ashley<\/p><\/div>\n

Administrators at FTI Consulting were appointed to the retailer at just before 10am on Tuesday and immediately sold the group\u2019s operating companies to a new entity owned by its lenders.<\/strong><\/p>\n

The process does not affect the retailer\u2019s pension scheme, suppliers, landlords or its immediate trading plans.<\/p>\n

Chairman Terry Duddy said: \u201cIt is disappointing to reach a conclusion that will result in no value for our equity holders.<\/strong><\/p>\n

\u201cHowever, this transaction will 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

\u201cWe remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.\u201d<\/p>\n

\"Debenhams\"

Terry Duddy<\/p><\/div>\n

Earlier in the day, Ashley\u2019s Sports Direct had made a revised \u00a3200 million rescue offer for Debenhams<\/strong>, delaying the department store\u2019s administration.<\/p>\n

The offer involved underwriting a rights issue<\/strong> which would have seen existing investors buying newly-issued shares and was an advance on a \u00a3150m plan tabled on Monday, which was rejected.<\/p>\n

Under the proposal, Debenhams\u2019 lenders would have had to agree to write off \u00a382m of its \u00a3720m debt mountain, as well as install the tycoon as chief executive.<\/strong><\/p>\n

Lenders to Debenhams said the proposal, on the terms set out, was \u201cnot sufficient\u201d.<\/p>\n

Debenhams said in a statement: \u201cThe board confirms that it received a revised, highly-conditional proposal from Sports Direct<\/strong> in the early hours of 9 April, which indicated a willingness of Sports Direct to underwrite an equity issue of \u00a3200m.<\/p>\n

\u201cThe company\u2019s lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the 8 April deadline.<\/strong>\u201d<\/p>\n

The pre-pack administration undertaken by the struggling department store chain will see its debt reduced and comes ahead of a wider restructuring which will see around 50 stores closed.<\/strong><\/p>\n

It will also see a \u00a3200m refinancing plan, announced in March, go ahead.<\/p>\n

Sports Direct confirmed on Tuesday afternoon that it was no longer looking at making a formal takeover offer for Debenhams.<\/p>\n

However, advisers at Lazard have been instructed to oversee a sale process<\/strong> for the retailer which will launch immediately, leaving the window open for Ashley or another buyer to gain control of the chain.<\/p>\n

Any bid would need to include the full repayment of the group\u2019s debt.<\/strong><\/p>\n

Laith Khalaf, equity analyst at Hargreaves Lansdown, said it was a \u201chefty price tag to stump up for a company that\u2019s struggling to make ends meet\u201d.<\/p>\n

\u201cIn theory it\u2019s conceivable there could be some residual value for shareholders<\/strong> as part of this process, but it\u2019s extremely unlikely,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

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