Debenhams seeks £150m in battle to see off Ashley

DEBENHAMS is racing to secure £150m from its lenders as it fends off an audacious boardroom coup by Sports Direct billionaire Mike Ashley.

If it manages to secure the loan, the department store group will use £40m to pay back emergency funding it acquired in February.

Ashley, 54, who has a 29.7pc stake in Debenhams, revealed plans days ago to seize control of the beleaguered department store chain by clearing out the bulk of its board and installing himself as chief executive.

But Debenhams’ creditors – which include hedge funds Alcentra, Silver Point and Angelo Gordon – are thought to be unhappy with Ashley’s proposals, preferring to back current management with more cash instead in the hope they can turn the firm around. The refinancing is expected to see Debenhams launch a major overhaul of its store portfolio that would see it close at least 50 of its 166 sites. It would also allow it to start paying down its £286m debt pile.

Debenhams has struggled in recent years as more customers shun the High Street and instead go online.

Last week it issued its fourth profit warning in just over a year.

If Debenhams were to go bust, its lenders would likely be left with the lion’s share of assets. The chain owns property worth an estimated £603.7m – more than double its net debt.