Debenhams is reportedly in advanced talks with insurance company Aviva for a buyout of its executive pension scheme.
The executive pension scheme is understood to hold just over £200m of assets, Sky News has reported.
The reported deal is solely for the Debenhams executive retirement plan and does not cover the larger benefits scheme for non-bosses. The main Debenhams retirement scheme for workers is thought to be planning to secure a deal in the longer term with a consolidation vehicle such as the Pension Superfund or Clara Pensions.
In March 2019, the retailer agreed a £200m refinancing deal with its lenders, and received the first facility of £101m that month. The remaining £99m was conditional on Sports Direct – which owns 29% of Debenhams – or another major (25%-plus) shareholder making a “firm and binding offer” for the retailer, which had to include an agreement to refinance its £560m group debt, by 8 April.
On 9 April, Debenhams entered administration and its group operating companies were sold to a new company owned by its lenders. This provided Debenhams with “significant additional funding” in line with the £200m previously agreed.
Debenhams then received £50m in financing in October 2019, from “certain of its existing lenders”.
The struggling department store chain is closing 19 stores across the UK this month, as part of its company voluntary arrangement.
Debenhams declined to comment. Drapers has contacted the Pension Fund trustees for comment.