Sports Direct backs out of CVA challenge

Sports Direct has pulled out of a challenge to store closure plans at Debenhams, but will continue to back a property company’s claim against the process.

The department store chain said the sports retailer had withdrawn from a challenge to its company voluntary arrangement (CVA), the insolvency process which was approved by creditors in May, but Mike Ashley’s company is continuing to fund a challenge brought by Combined Property Control Group (CPC) .

Debenhams chairman Terry Duddy called on CPC to withdraw the action and vowed that Debenhams will vigorously defend its position.

Meanwhile an eerie calm descended across the markets as traders and investors held their collective nerves before the announcement of the next prime minister.

The FTSE 100 barely moved, closing up 6.23 points at 7,514.93, while the pound wobbled lower, down 0.21 per cent at $1.2478, and losing 0.17 per cent to €1.1127.

Analysts put the lack of movement down to traders awaiting the results of Johnson vs Hunt in the prime ministerial race, either of whom will almost certainly raise spending, which could benefit the markets. This was countered by new forecasts from the National Institute of Economic and Social Research which said the UK is likely to already be in a recession.

In other news, BT agreed to move into a headquarters in east London after the £210 million sale of its current base. Shares lost 1.96p to 187.02p – largely due to news that regulator Ofcom could ban excessively long contracts for mobile operators such as BT’S EE business.