Mike Ashley: Debenhams advisers should be “put in prison”

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Debenhams store closures
// Sports Direct boss Mike Ashley releases statement lashing out at Debenhams advisers
// “If there were any justice in the world the majority of the advisers would be put in prison.”
// Statement comes a day after Debenhams bondholders approved £200m refinancing scheme
// Retailer can now undergo a restructure that could wipe out existing shareholders, including biggest investor Sports Direct

Mike Ashley has hit out at Debenhams’ advisers after bondholders approved a refinancing scheme that could lead to a wipe-out of existing shareholders – of which his company Sports Direct is the biggest one.

The high street tycoon has been grabbing headlines in recent weeks in his attempts to seize control of Debenhams, but yesterday the department store received approval from most of its bondholders to make amendments to loan notes due in 2021 and press ahead with a £200 million refinancing scheme.

In response, Ashley released a statement this morning that took aim at the Debenhams advisers.

“Now the results of the vote are known and we have also been subsequently advised that the supportive HSBC are no longer part of Debenhams’ revolving credit facility, I think that, if there were any justice in the world, the majority of the advisers would be put in prison,” he said.

FTI Consulting has been working with lenders to Debenhams, while KPMG has been advising the retailer itself.

The refinancing approval from bondholders means Debenhams can now embark on a wider restructuring scheme with the goal of securing its future.

The beleaguered department store retailer is expected to explore a debt-for-equity swap or a pre-pack administration, with the latter the most likely option as it does not require shareholder approval.

However, both options could lead to a complete wipe out of existing shareholders such as Ashley, who controls the biggest stake in Debenhams at 29.7 per cent through Sports Direct.

A CVA to accelerate store closures and rent reductions could also be explored or announced at a later stage.

Debenhams’ announcement yesterday also came just a day after Sports Direct said it was mulling a potential £61.4 million deal would bring the remaining Debenhams shares Ashley does not own under his control.

He would pay 5p per share, or £43 million, adding it would also assist the department store in addressing its immediate funding requirements.

The offer was also subject to conditions, such as Debenhams immediately appointing Ashley as its chief executive.

Sports Direct also wanted Debenhams to terminate the now-approved plans to seek permission from bondholders for a £200 million cash injection and refinancing scheme.

However, Debenhams resisted overtures from Ashley.

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