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Debenhams to raise cash to shrink debt

Debenhams is reported to be planning to raise equity capital to reduce its debt levels amidst worsening trading on the high street.

According to The Financial Times, Debenhams is planning to discuss options available to it at its next board meeting in January.

Debenhams is not thought to be close to breaching its banking covenants however the newspaper said that the management recognised that its existing debt levels, which are more than £1 billion, were too high in the current market.

It is unclear whether private equity stakeholders TPG and and CVC or Debenhams’ four banks will play any role in raising cash.

Debenhams is believed to have performed better than many of its rivals over the crucial Christmas trading period, thanks to its clever discount day trading stance, which caught some of its competitors off guard and enabled it to gain more market share.

A spokesperson declined to comment to The Financial Times.

Debenhams will update the market on trading on January 6. Drapers Online will bring you all of the highlights from its trading statement.

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