// Mike Ashley issues formal request for Debenhams shareholder meeting
// He wants to oust all board members, except the finance boss, and install himself on it
// His previous attempt at a boardroom coup was foiled due to a technicality
Mike Ashley has requisitioned a meeting of Debenhams shareholders as part of another attempt to give the boardroom a clean sweep and install himself on it.
Ashley issued a statement to the market with the formal request after his previous attempt on March 7 was foiled by a technicality, because Sports Direct’s shares in Debenhams are held by a third-party nominee.
Ashley – who has a stake of 29.7 per cent in the department store retailer through his Sports Direct retail empire – has ambitions to install himself on the board and remove all other members except finance boss Rachel Osborne.
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As part of his proposal, he would step down from his position as Sports Direct chief executive, to be replaced by deputy finance boss Chris Wootton in an acting capacity.
“Sports Direct would like the matter of Debenhams board appointments to be put to the vote of the Debenhams shareholders as soon as possible,” the company said.
The Retail Gazette has contacted Debenhams for comment.
However, the retailer had expressed “disappointment” at Ashley’s proposals when he made his first, now-invalid requisition earlier this month.
“The board has been engaging with Sports Direct and our other stakeholders regarding options to restructure our balance sheet and is disappointed that Sports Direct has taken this action,” it stated at the time.
“In the meantime, discussions to address our future funding requirements are well advanced.”
The latest episode in Debenhams’ boardroom drama comes after Ashley successfully led a coup to oust Debenhams chairman Sir Ian Cheshire from the boardroom earlier this year. Cheshire subsequently resigned.
The same coup also saw Sergio Bucher ousted from the boardroom, but he was permitted to continue carrying out his duties as Debenhams chief executive.
The retailer is in the midst of scrambling to secure a £150 million refinancing deal from lenders this week ahead of a rent deadline.
Without the fresh capital, there is a chance the 206-year-old business could fall into administration.
Ashley has also offered a loan of £150 million to Debenhams, which it previously said it would consider.
However, Sports Direct’s one-year loan is subject to conditions, such as installing Ashley as Debenhams’ new chief executive, and potentially increasing its stake in the department store to 35 per cent.
The loan offer came almost immediately after Sports Direct revealed it had flagged Debenhams to the Financial Conduct Authority and publicly accused it of misleading the market on its communication of the health of its finances.
The department store has since denied it had misled the market.
Meanwhile, Debenhams is reportedly eyeing a potential pre-pack administration as a way to save the business and stave off the takeover campaign led by Ashley and Sports Direct.
A pre-pack administration, which does not require shareholder approval, is an insolvency process that involves a company entering administration and then selling it immediately to a connected party, such as a lender, while shedding most of its liabilities.
In February, the embattled department store secured a short-term cash injection of £40 million after lenders agreed to extend its overdraft limit as it sought refinancing to secure its future.
The current negotiations for a further £150 million comprises of £40 million that would be used to refinance the £40 million cash injection it received.