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You can find the current article at its original source at https://www.theguardian.com/business/2019/mar/29/mike-ashley-hits-out-at-debenhams-advisers-as-stake-could-be-wiped-out
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| Debenhams offers Sports Direct chance to keep stake as it wins £200m lifeline | |
| (32 minutes later) | |
| Debenhams has offered Sports Direct a chance to hold on to its stake in the company by making a firm bid for the business or injecting new money as part of a £200m rescue finance package. | |
| The statement was issued hours after Mike Ashley launched a stinging attack on advisers to the department stores group, saying they should be jailed after Debenhams rejected a potential takeover bid from the founder and chief executive of Sports Direct in favour of pressing ahead with its refinancing plans. | The statement was issued hours after Mike Ashley launched a stinging attack on advisers to the department stores group, saying they should be jailed after Debenhams rejected a potential takeover bid from the founder and chief executive of Sports Direct in favour of pressing ahead with its refinancing plans. |
| “I think that if there were any justice in the world the majority of the advisers would be put in prison,” Ashley said in a brief statement. | “I think that if there were any justice in the world the majority of the advisers would be put in prison,” Ashley said in a brief statement. |
| Sports Direct has been given until 8 April to decide whether to meet the demands or see its 29% stake wiped out as Debenhams lenders take control of the department store’s equity. | Sports Direct has been given until 8 April to decide whether to meet the demands or see its 29% stake wiped out as Debenhams lenders take control of the department store’s equity. |
| Debenhams said on Friday it had agreed £101m of immediate new money from its lenders, £40m of which would replace a short-term loan taken out last month. A further £99m is subject to Ashley’s sports retail group agreeing to either a firm offer for the company, including refinancing all its debts and providing new working capital, or the provision of new funds via a loan or participation in a rights issue. | |
| In its statement the department store chain said the second tranche of cash would not be forthcoming unless Ashley cancels his call for a shareholder meeting at which he wants to oust all but one of Debenhams’ board and install himself as chief executive. | |
| Terry Duddy, the chairman of Debenhams, said: “We are pleased to have agreed this comprehensive funding package which secures the future of the Debenhams business and provides reassurance for Debenhams’ employees, pension holders, suppliers, lenders and other stakeholders. We have also preserved a route for our shareholders to participate in the future of the business but this requires the support of our major shareholder.” | |
| Debenhams said that if Sports Direct did not agree to provide new funding, ownership by the group’s lenders would be the best way to ensure “stability and continuity of trading” that would minimise disruption for the business, its customers, employees and suppliers. However, the company made clear that such a move “would very likely result in no equity value for the company’s current shareholders”. | |
| Debenhams is facing a wrangle for control between its lenders and Ashley as it struggles under a huge debt pile, against a tough backdrop for high street retailers. | Debenhams is facing a wrangle for control between its lenders and Ashley as it struggles under a huge debt pile, against a tough backdrop for high street retailers. |
| Earlier this week, Sports Direct said it would consider making a £61.4m offer for Debenhams, on condition that Ashley was immediately appointed chief executive of the ailing department store chain. | Earlier this week, Sports Direct said it would consider making a £61.4m offer for Debenhams, on condition that Ashley was immediately appointed chief executive of the ailing department store chain. |
| On Thursday, however, Debenhams’ bondholders agreed to alter the terms of some of their bonds in a move that gave the retailer the green light to press ahead with its £200m rescue plan. | On Thursday, however, Debenhams’ bondholders agreed to alter the terms of some of their bonds in a move that gave the retailer the green light to press ahead with its £200m rescue plan. |
| Debenhams has debts of £560m and is expected to lose £25m this year. Its shares have collapsed to only 2p and it is in urgent need of cash to keep trading. It has already announced that 50 of the group’s 165 stores are likely to close as part of the plans. | Debenhams has debts of £560m and is expected to lose £25m this year. Its shares have collapsed to only 2p and it is in urgent need of cash to keep trading. It has already announced that 50 of the group’s 165 stores are likely to close as part of the plans. |
| Ashley has built up a stake in Debenhams over the past five years but in that time the fortunes of the chain have gone into reverse and the share price has tumbled from about 80p. | Ashley has built up a stake in Debenhams over the past five years but in that time the fortunes of the chain have gone into reverse and the share price has tumbled from about 80p. |
| In January, Ashley told MPs he had already written off more than £100m of investments in the department store and now fears completely losing his grip on a retailer that has been a feature of UK high streets for more than 200 years. | In January, Ashley told MPs he had already written off more than £100m of investments in the department store and now fears completely losing his grip on a retailer that has been a feature of UK high streets for more than 200 years. |
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