Debenhams ploy to leave Ashley steaming in Miami
DEBENHAMS will scrap leases that have weighed it down for more than a decade as part of plans likely to be unveiled within weeks.
If successful, the strategy will torpedo the machinations of billionaire Mike Ashley who wants to install himself as boss. Ashley is understood to have been travelling back and forth to his mansion in Miami, Florida in recent weeks as he hatched plans with lieutentants to seize control of the chain.
Debenhams’ former owners signed scores of onerous contracts which at the time helped line the pockets of private equity firms CVC, Texas Pacific and Merrill Lynch Private Equity. But they left the chain starved of cash.
Sources said Debenhams will secure £200million in short-term loans this week in an ‘orderly reorganisation’.
Quarterly rent will be paid in full tomorrow. A broader ‘pre-pack’ restructuring deal – a partial insolvency – is likely next month. Up to 50 stores face closure if new lease terms cannot be agreed. Shops are expected to remain open at least until Christmas if negotiations succeed.
That would scupper Ashley, the biggest shareholder, who plans to oust the board at a May meeting. One source said: ‘The Debenhams board has been trying to reach a solvent solution for lenders and shareholders.
‘But Ashley is doing things that frighten the life out of everyone. This deal should benefit most of those involved but unfortunately the shareholders will now lose out.’