Debenhams on brink of falling into administration
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Debenhams may fall into pre-pack administration today after its rejection of a fresh funding offer worth 200 million pounds from Sports Direct, made on Tuesday this week. The company has announced suspension of its shares just before the start of today’s trading. A day earlier, Debenhams had rejected another similar offer of 150 million pounds cash injection into the department store chain by Mike Ashley's company.
Sports Direct offer was subject to a number of conditions, including the appointment of Ashley as Debenhams' CEO and Debenhams' lenders agreeing to write-off 82 million pounds of Debenhams' 720 million pounds total debt facilities.
According to BBC, while Debenhams would continue to operate its stores, the company has already announced a plan which would see around 50 store closures from next year and rent renegotiations with landlords. The company had issued three profit warnings last year and has a debt of 640 million pounds.
Picture:Debenhams press centre