Debenhams Considering Mike Ashley’s Loan Offer
Friday, March 15, 2019
Debenhams are currently considering a proposed loan of £150 million from Sports Direct, installing Mike Ashley as the chief executive. On Wednesday it was said that the offer to loan money to Debenhams caused a big clash of opinions in the boardroom, and that there was a complaint made to the City watchdog by Sports Direct over the communications from Debenhams.
Only a few days before Mike Ashley attempted to get onto the Debenhams board, Sports Direct brought up issues they had with the retailer’s results and their statements that followed, feeling that the board were misleading with their communications. Debenhams fired back saying that the complaints were “unfounded and self-serving”.
Debenhams have confirmed that there will be considerations towards the proposed loan from Sports Direct, and that a loan this big would need to be backed by the current lenders and “material amendments” to any facilities in place currently.
The Debenhams shareholders will need to cast a vote on whether to give new shares to Sports Direct, bringing its holdings to 35%; if this were to go forward, the loan could be interest-free.
In 2018, Mike Ashley had bought House of Fraser send Evans Cycles, and has also been in the process to bid for HMV and Patisserie Valerie, and Debenhams once before, but got rejected.