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Debenhams shareholders 'support Mike Ashley' in becoming CEO

Sports Direct Group says it has been contacted by Debenhams shareholders expressing their support for the appointment of Mike Ashley as Debenhams’ CEO. 

Sports Direct says it has also been contacted by shareholders in Debenhams regarding the protection of their interests in the department store chain. As a result, it has created a template letter for shareholders in Debenhams to use if they want to make their views known directly to Debenhams. 

Meanwhile, Sports Direct CEO Ashley has reportedly sent around 25 legal letters detailing “serious allegations of wrongdoing” to senior directors at Debenhams, in a bid to delay its refinancing plans. The letters were sent between 7 March and 27 March, the Mail on Sunday has reported.

Debenhams declined to comment. Sports Direct has been contacted for comment. 

It comes after Debenhams agreed a £200m refinancing deal with its existing lenders last week, which leaves the door open for Sports Direct to formally table an offer for the business.

The struggling department store chain expected to receive the first facility of £101m on Friday.

The remaining £99m is conditional on Sports Direct or another major shareholder making a “firm and binding offer” for Debenhams, which must include an agreement to refinance its group debt, amounting to £560m.

Alternatively, Sports Direct could provide funding for Debenhams in the form of equity or a loan known as a “subordinated debt instrument”, and cancel its request for an extraordinary general meeting (EGM) to appoint its boss Mike Ashley as CEO of the department store retailer.

If neither happens by 8 April, Debenhams will enter a pre-pack administration.

As previously announced, Debenhams will begin its store portfolio restructuring after Christmas. This will take up to three to five years and involve 50 stores.

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