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Debenhams on brink of £200m lifeline

Debenhams is reportedly about to secure £200m in funding that could help the struggling department store resist Mike Ashley’s takeover bid.

The department store chain could announce the larger-than-expected funding lifeline as soon as Friday, Sky News has reported.

Debenhams announced in March that it was in advanced negotiations to secure a £150m lifeline from its existing lenders, after receiving an initial cash injection of £40m in February.

However, just days later, Mike Ashley’s Sports Direct offered Debenhams a £150m interest-free loan in exchange for 5% stake in the company, as part of a takeover bid.

Under the proposal Ashley would become director and chief executive officer of Debenhams. Although Debenhams said it would consider the offer, its lenders have ruled out accepting it, insiders have reported.

The news comes after Sports Direct confirmed it would buy Debenhams should it collapse into administration. However, the new £200m in funding would offer a cushion for Debenhams should it reject the proposal.

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