Global Economy

Debenhams set for administration after rejecting new Ashley plan


British department store chain Debenhams looked set to fall into the hands of its lenders on Tuesday after it rejected a new overnight rescue plan from investor Mike Ashley in the latest twist in an acrimonious battle.

Fighting to defend his 30 percent stake before all shareholders are wiped out, Sports Direct boss Ashley made a midnight offer to underwrite a 200 million pound ($260 million) rights issue in exchange for him becoming CEO.

Debenhams, once Britain’s biggest department store group, rejected the offer first thing on Tuesday. It had rejected a 150 million pound rescue plan from Ashley on Monday.

The company said it was now talking to its lenders about accessing more debt but this would likely only happen if the lenders took full control of the operating assets.

“The company anticipates making a further announcement during the course of the day following further discussions with its lenders,” it said. Its shares were suspended before the stock market opened on Tuesday.

Despite its long history, Debenhams has been battling for survival after a consumer shift online and to cheaper outlets destroyed 90 percent of its share value in the past year.

It currently has debt facilities worth 720 million pounds and a market valuation of 22 million pounds.



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