Monday 11 March 2019 8:02 am | Updated: Monday 03 June 2019 12:50 am

Debenhams strikes back against Mike Ashley with ‘advanced’ plans to raise £110m

Debenhams said “advanced negotiations” are underway to secure up to £150m in loans to keep it alive this morning, as it fights back against Mike Ashley’s bid to oust the board.

The struggling retailer said the £40m bridging loan it secured in early February comprises part of this sum, but that it is seeking to borrow more than three times that amount.

“Debenhams confirms that it is in advanced negotiations with its current lenders about additional facilities of approximately £150m. £40m of these facilities will refinance the £40m bridge facility announced on 12 February,” the board told investors today.

Debenhams' share price rose as much as 13 per cent to 4p in early morning trading.

It comes after the high street stalwart issued a second profit warning in just two months last week, admitting it would not meet a reduced target it set only in January.

That warning led to Sports Direct owner and 30 per cent shareholder Mike Ashley demanding a meeting to wipe out the board and insert himself as Debenhams’ new boss.

Ashley sent the retailer’s volatile share price up 25 per cent as he called for an extraordinary general meeting, calling for all but one of the board – newly installed CFO Rachel Osborne – to be sent packing.

The latest update from the board can be read as an attempt to assuage investors who might consider backing Ashley’s bid to start with a clean slate with himself at the helm.

“The market believes, that unless Debenhams can independently raise some cash, Mike Ashley will attempt to bed Debenhams down with House of Fraser,” David Buik, analyst at spread better Core Spreads, said.

However, late on Friday MPs began to probe Debenhams’ pensions schemes as it seeks to arrange a refinancing deal.

That deal could see it close around 50 stores in a company voluntary agreement, dilute the value of shares in a rights issue to raise fresh cash, or do a debt-for-equity swap with lenders.

Debenham’s executive pension plan was fully funded in October 2017, though its non-executive retirement scheme was in deficit.

Debenhams was paying £5m a year until March 2022 to return that scheme to a funded position.