Proactive Investors - Run By Investors For Investors

Debenhams bondholders back refinancing plan in blow to Sport Direct's Mike Ashley

Debenhams said a majority of holders of its 5.25% senior notes due 2021 had agreed to change the terms of their bonds
Debenhams has warned that its plan could wipe out shareholders, including Sports Direct

Debenhams PLC (LON:DEB) shares retreated on Thursday after the struggling retailer announced that it has secured support from bondholders to carry out a £200mln refinancing deal that could wipe out shareholders, including Mike Ashley’s Sports Direct International PLC (LON:SPD).

The department store chain said a majority of holders of its 5.25% senior notes due 2021 had agreed to change the terms of their bonds, meaning it can press ahead with its debt restructuring.

READ: Mike Ashley sets out terms and conditions of possible £61mln cash offer for Debenhams

The announcement will come as a blow to Ashley, who owns nearly 30% of Debenhams through Sports Direct and wants to take control of the company.

Sports Direct on Wednesday said it was weighing up a £61.4mln, or 5p a share cash offer to buy Debenhams in a deal that would include putting Ashley in charge and the termination of the noteholder consent solicitation process.

Debenhams said it would consider any offer that was made but would still carry out a plan to secure £200mln pounds of extra funds from lenders and pursue restructuring options.

The retailer said any takeover bid would not address its immediate funding needs.

Last week, Debenhams warned that its refinancing plan would result in no equity value for its current shareholders, including Sports Direct.

Debenhams shares soared over 50% on Wednesday, following news of Ashley's bid plans, but in afternoon trading today were down 25% at 2.10p.

 -- Adds share price --

View full DEB profile View Profile

Debenhams PLC Timeline

Related Articles

"The group's performance over the past three years demonstrates the continuing success of our strategy to access more customers and markets," said chief executive John Nichols.
Scans and MRI
November 28 2018
The firm's subsidiary, Imaging Biometrics, recently appointed a South Korean distributor a few weeks after receiving the first commercial order for its StoneChecker technology
Company is looking for more acquisitions after integration of Metro Rod

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use