Debenhams finalizes 150-million loan agreement to shield itself from Mike Ashley
The owner of Sports Direct wants to take control of the department store company, of which already has 30% of the shares. The new loan will help the company underpin its restructuring plan.
Debenhams seeks more liquidity to shield itself from the owner of Sports Direct. The department store company is in advanced negotiations about the signing of a 150-million-pound (173-million-euro) loan with its current creditors, in an attempt to curb Mike Ashley who, through Sports Direct, tries to seize control of the company.
Last week, Sports Direct, which owns 30% of Debenhams shares, convened an extraordinary shareholders meeting in order to remove at least six executives from the department store company to empower Ashley.
Debenhams explained that the new loan will strengthen the company that, last February, already received a 40-million-pound (46-million-euro) line of credit. With that capital, the company gained a greater margin for maneuver to underpin its refinancing and restructuring plan.
Debenhams has among its main shareholders Sports Direct, company founded by Mike Ashley
The department store company and Ashley have been struggling for the control of the company since last year. In December, Debenhams rejected a 40-million-pound (51.5-million-dollar) loan offered by Mike Ashley.
Debenhams closed fiscal year 2018 (ended on September 30) with 491.5 million pounds (633.8 million dollars) in the red. A year ago, the company obtained a net profit of 59 million pounds (76 million dollars). The company has 165 points of sale.
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