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Debenhams rejects £40m loan from Mike Ashley

Debenhams has rejected a £40m loan offered by Sports Direct owner Mike Ashley to help the struggling department store.

In a letter to Debenhams chief executive Sergio Bucher published by The Telegraph, Ashley said he was offering the business “a very public statement of support at a critical time for the Debenhams business”.

He added that the Debenhams board “doesn’t really seem to appreciate the position that Debenhams is currently in and their responsibility to shareholders”.

Sports Direct has a 29% stake in Debenhams.

Debenhams said: “We welcome Sports Direct’s proposal as a clear demonstration of their willingness to support the company. However, as the offer came with conditions that could affect the interests of other stakeholders, while the board does not think it could accept the proposal, as presented, it has invited Sports Direct to engage as part of our broader refinancing process.”

Ashley said November was the “worst November for retailers in living memory” and pointed to speculation that Debenhams has “zero chance of survival.”

He added: “If I’m sounding extremely frustrated – well, I am. We’ve seen this before, with Blacks and House of Fraser. They didn’t want any help either. We don’t want to see Debenhams fail.

“It’s not in our interest to see it fail, but without something changing rapidly all of the shareholders risk getting wiped out.”

Readers' comments (4)

  • Barme or foolish by Debenhams? Very few people think they will survive in their current form.

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  • Apparently Li & Fung are coming to the rescue! Now that would be surprising. Taking over the Sourcing or more..........?

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  • One can only assume that if Debenhams have turned down Ashley's offer, they have someone in the wings. Whoever it is though, has more money than sense as Debenhams is finished in its current format.

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  • Debenhams needs to downsize by 75% then rebrand, as its name is about as aspirational as a day on the hard shoulder of the M1. John Lewis oozes middle class appeal which Debs so badly lacks.

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