Debenhams prepares to ask lenders for extra £50m lifeline
Debenhams is preparing to ask lenders for an additional £50m lifeline as it approaches the critical Christmas trading period.
The department store, which was taken over by its lenders after it fell into administration three months ago, could require access to additional borrowing facilities as soon as this autumn, Sky News reported.
Read more: Debenhams urges Sports Direct to drop legal action over restructuring plan
The additional lending, which is expected to be around £50m, would be in addition to a £200m facility secured in March, which has not yet been fully drawn down.
Debenhams’ lenders remain supportive of the restructuring plan agreed earlier this year, sources said.
Under the plan around 50 of the embattled retailer’s 166 UK stores are expected to be shuttered, with the first round of 22 closures planned for next year. More than 4,000 jobs will be lost following the closures.
The company is currently in the process of replacing former chief executive Sergio Bucher who stepped down following the creation of the restructuring plan.
A string of retailers have recently been forced to agree restructuring agreements with creditors, including Topshop tycoon Sir Philip Green’s Arcadia, as they battle increasingly tough high street trading conditions.
Read more: Sports Direct launches legal challenge to Debenhams restructuring plan
Under Arcadia’s company voluntary arrangement (CVA), which was narrowly approved by creditors last month, 23 stores will be shuttered and rent reductions of up to 70 per cent will be introduced at nearly 200 stores.
Budget clothes retailer Select and fashion brand Monsoon Accessorize both also passed CVAs last month.
Main image credit: Getty