Debenhams in to stay under the control of its lenders after administrators failed to find a suitable buyer for the collapsed department store chain.
Celine UK NewCo 1 Ltd, which represents a consortium of Debenhams lenders, said none of the bids received for the chain had been “at the level required to be taken forward”, and as a result ownership of the group would remain with the group.
Stefaan Vansteenkiste, chief risk officer of Celine, said the group was “a committed long-term owner” and had £200mln in fresh funding which it said would be used to finance the company’s “operating turnaround”.
Terry Duddy, Debenhams executive chairman, added that the group was “confident” that its proposals for a company voluntary arrangement (CVA) would be approved and would give the chain “the platform to deliver a turnaround”.
The group has already earmarked 22 of its UK department stores for closure as part of its CVA proposals, with Altrincham, Ashford, Birmingham Fort, Canterbury, Chatham, Eastbourne, Folkestone, Great Yarmouth, Guildford, Kirkcaldy, Orpington, Slough, Southport, Southsea, Staines, Stockton, Walton, Wandsworth, Welwyn Garden City, Wimbledon, Witney, Wolverhampton all on the chopping block.
The closures are also expected to impact several listed UK retail investment trusts that have exposure to Debenhams stores, including Intu Properties PLC (LON:INTU), Hammerson PLC (LON:HMSO) and British Land Company PLC (LON:BLND).
Debenhams collapsed into administration last month under the weight of a £720mln debt pile and was placed under the control of Celine by its administrators.
The pain is likely to be particularly acute for Ashley, who tried multiple times to install himself as chief executive of Debenhams through a takeover offer and a £200mln lifeline offer that Debenhams rejected.