Published: Wed, April 10, 2019
Money | By Ralph Mccoy

Sports Direct offers £150m lifeline

Sports Direct offers £150m lifeline

Mr Ashley has been battling to prevent this outcome but a series of overtures towards Debenhams, all of which involve him taking the job of chief executive, have been rejected.

In a letter to the Debenhams board dated April 5, Sports Direct said it would be willing to underwrite the group with 150 million pounds in cash if Ashley was named as CEO, the FT said.

A spokesman for Debenhams declined to comment.

Sports Direct Intl Plc (LON:SPD) notes the recent press speculation regarding a proposal made by Sports Direct to underwrite a £150 million equity issuance by Debenhams plc ("Debenhams").

It would form part of a "comprehensive refinancing" of the struggling department store chain and would see Mr Ashley appointed as Debenhams CEO and would be contingent on the retailer's lenders agreeing to write off £148 million of debt.

The company, which had 19 million customers and 2.9 billion pounds in sales a year ago, has said it needs to refinance its balance sheet and restructure the business to make it more sustainable.

"It seems most likely therefore, that Debenhams shares will soon cease to have any value, as lenders take full control of the retailer".

"Mike Ashley's methods may be unorthodox, to say the least, but the Debenhams board needs to make sure it gives Sports Direct's offer proper consideration".

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The decision of Debenhams' board to reject the offer was confirmed in a statement this afternoon.

If Mr Ashley's overtures are rebuffed, Debenhams is likely to go into administration this week with its lenders seizing control.

Sports Direct said that Mr Ashley and two colleagues who attended the meeting had taken lie detector tests about what had happened.

Sports Direct said over the weekend that Debenhams and its advisors had undertaken a "sustained programme of falsehoods and denials" and called on its board members Terry Duddy and David Adams to take a lie detector test.

The other half would be released depending on whether Sports Direct launched a firm takeover offer or agreed on the provision of at least £200mln in new funds via a loan or participation in a rights issue.

On Sunday, in its latest swipe at Debenhams management, Sports Direct called for an investigation and for the firm's shares to be suspended.

They have already invested £101m into a Debenhams rescue package, and stand ready to invest anothrt £99m if Sports Direct can't reach an agreement, he pointed out.

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