Debenhams secures £200m lifeline with lenders

New players? Why get players who are in their prime now when you can get players who were good a few years ago for a fraction of the cost? Just like a hoody or some joggers

New players? Why get players who are in their prime now when you can get players who were good a few years ago for a fraction of the cost? Just like a hoody or some joggers

Mike Ashley of Sports Direct fame has been gleefully filling his oversized mug with stricken high street chains, and has made no secret of his desire to add Debenhams to his catch.

The money has been divided into two tranches, with Debenhams getting £101m now and another £99m when its long-term future has been secured. Ashley has until April 8 to make his move.

"Ashley's now between a rock and a hard place".

'He faces either seeing his stake in Debenhams disappear or having to stump up cash to keep shares in the company alive.

The company has snubbed the Sports Direct tycoon's previous efforts to seize control, including a recent £61m takeover approach, because it said the offer did not provide "a solution to the group's immediate working capital needs, and the board could find no way for the group to continue to trade until such time as the offer, if made and successful, had closed".

It is the latest twist in the battle for control of Debenhams, which is struggling under a huge debt pile and a tough backdrop for high street retailers.

Shares in Debenhams jumped more than 40% following news of the refinancing deal being completed.

The billionaire is the biggest shareholder in Debenhams with 30% of the company but his stake looks set to be totally wiped out.

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Despite the deal, Debenhams said that it would continue with its plans to reduce its number of stores and agree lower rent rates.

Media captionCan Mike Ashley save debt-laden Debenhams?

Ashley has already managed to get chairman Sir Ian Cheshire ousted from the business.

"As the termination of Debenhams noteholder consent process was one of the waivable pre-conditions to the proposal, Sports Direct is giving further consideration to Debenhams' announcement in the context of the proposal", it said.

In a Friday statement, Sport Direct said was now considering its options.

"The company therefore had no implementable alternative to its well-developed plans to enter into the facilities in order to protect the interests of its broader group of stakeholders including employees, pension holders, suppliers and lenders".

He added that it "has preserved a route for our shareholders to participate in the future of the business, but this requires the support of our major shareholder", in a pointed address to Ashley.

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