Struggling Debenhams on Thursday pressed ahead with its restructuring plans after bondholders backed it, in a snub to Mike Ashley’s Sports Direct, which is mulling buying the business.
The department store chain needed bondholders’ consent to borrow £200 million from its existing lenders, including Barclays, HSBC and Bank of Ireland. This will allow it to pursue restructuring options to secure the company’s future, but could wipe out shareholders, such as Sports Direct.
The business said more than half its bondholders have agreed to tweaks to the 5.25% senior notes due in 2021. The rest have until 5pm to accept the offer.
Bagging a refinancing deal could derail a potential last-minute bid from Sports Direct, its largest shareholder. The sportswear retailer said yesterday it was prepared to pay 5p a share for the crisis-hit firm, valuing it at £61.4 million, if Mike Ashely becomes chief executive and Debenhams drops its current refinancing plans.
Ashley has been trying to take control in a number of ways by offering loans, saying he wants to buy Debenhams’ Danish business and demanding the removal of all board directors, except the finance boss.
HQ set for move back to Oxford Street
Debenhams on Thursday said it was moving its HQ back to Oxford Street in a bid to save cash.
The retailer’s head office had been above its Oxford Street store until 2013, and staff will now move back there from nearby Regent’s Place.
It has terminated the lease at Regent’s Place, which had been due to run to 2038. Facebook will now take up the space, while landlord British Land managed to halve its exposure to Debenhams.
The chain said the move will “deliver a material saving in our annual rent bill” of £230 million. It plans to make cost savings of £80 million by 2020.
