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Debenhams appoints financial adviser

Debenhams has appointed financial adviser Lazard to reorganise its debt and capital structure.

The bank has been briefed to reorganise the company’s £900 million debt and capital structure, according to the Financial Times

This could include raising equity, renegotiating debt repayment beyond the current 2011 deadline and waiving covenants, the newspaper says.

Debenhams performed better than expected, and better than rivals, over the Christmas period. However, concerns over Debenham’s level of debt have have put pressure on the company and impacted on its share price.

The department store said it had money in the bank to pay a £100m debt payment due in April.

Yesterday, JP Morgan analyst Richard Chamberlain wrote in a note: “We think Debenhams is managing its business very well during the downturn and that it has the right strategy of driving free cash flow.”

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