Debenhams denies lenders’ support is wavering over debt restructuring
Debenhams today denied that the commitment of its lenders to a debt for equity swap is wavering, as the beleaguered retailer responded to reports that securing a debt restructuring is dependent on landlords granting steep rent cuts.
The high street chain could be forced to close further stores if it is unable to negotiate lower rents and rate bills with landlords and local councils.
Any additional closures are not expected to happen until at least 2021 over a two to three year period, and numbers are still expected to be in line with the original guidance of 50 stores.
The Sunday Times reported that the department store has warned landlords that its lenders may refuse to back a debt restructuring plan unless rent reductions can be agreed.
However the retailer said this afternoon that lenders’ commitment to the debt for equity swap, which was announced in April last year, is “not in question”.
A Debenhams spokesperson said: “The business is now in a position to proceed with the final phase of its balance sheet restructuring, to include the write-down of at least £100m of debt, as was announced in April 2019.
“The precise timing and location of any further store closures will depend on our continuing negotiations with landlords and councils to determine whether rent and rates bulls can adjust to more realistic levels reflecting today’s retail market conditions”.