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Debenhams rescue plan not ‘workable’, says Ashley

Sports Direct owner Mike Ashley has said Debenhams refunding plan, which could result in wiping out equity for shareholders, is not a “workable solution”.

On Friday Debenhams asked its existing lenders for a £200m cash injection, saying it would allow the retailer to enter into new funding facilities and give it the ability to pursue restructuring options to secure its future.

However, some of the changes would result in no equity value for the company’s current shareholders.

In a statement today Sports direct, which offered to buy Debenhams’ Danish department store Magasin Du Nord last week, said it was not a viable solution.

“Regarding the guidance provided to Sports Direct on behalf of the Debenhams board, if guidance as to what might represent a workable solution for Debenhams could result in no equity value for Debenhams’ current shareholders, from Sports Direct’s perspective and that of Debenhams’ wider stakeholders, that is not a workable solution.”

Sports Direct added that it thought its offer for Magasin du Nord was “in excess of fair value and addresses Debenhams’ immediate liquidity concerns.”

It said it would “strongly recommend that the Debenhams board reconsiders the offers made by Sports Direct to date and their own duties as directors of Debenhams.”

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