PUBLISHED: 15:48 08 April 2019 | UPDATED: 15:48 08 April 2019
Debenhams bosses have been attacked by Sports Direct owner Mike Ashley after pressing ahead with a £200m refinancing plan to avoid his takeover bid.
On Sunday night the billionaire called for the retail chain’s board to be investigated and trading in its shares to be suspended.
Mr Ashley has around a 30% stake in the department store, which has branches in Ipswich and Bury St Edmunds, but would be wiped out if it goes ahead with the £200 million refinancing plan it announced in March.
Last week the Newcastle United owner tabled a £150m rescue offer for the struggling high street chain, which still depends on him being made chief executive.
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However if Mr Ashley’s proposals continue to be rebuffed the retail giant is likely to go into administration by the end of this week, with lenders seizing control.
Under Debenhams’ £200m refinancing proposal , £101 million is to be drawn down immediately, in order to allow restructuring, which will include store closures and rent reductions.
The other £99 million would have been made available if Sports Direct – or any other shareholder with a stake of more than 25% – fulfilled one of two conditions by April 8.
One option allowed Mr Ashley to make a takeover offer which included arrangements to refinance the group’s debt.
Alternatively, he had to call off an emergency meeting he requested to install himself on the retailer’s board and commit to either providing funding for the business or underwriting the issue of new shares.
He tabled a last-minute rescue package on Friday in which he offered to underwrite a £150 million rights issue for Debenhams.
It would form part of a “comprehensive refinancing” of the struggling chain and would see Mr Ashley appointed as Debenhams chief executive and would be contingent on the retailer’s lenders agreeing to write off £148 million of debt.
The billionaire tycoon also said that Sports Direct is still giving “active consideration” to a conventional takeover of the high street firm.
Mr Ashley said: “Whilst Sports Direct continues to actively evaluate all possible options to support Debenhams, it wishes to clarify that, as a technical matter, were it to complete, the equity issuance would be an alternative transaction to the possible offer and vice versa.”