Sports Direct calls on Debenhams shareholders to protest against financing deal
Sports Direct has today called on Debenhams shareholders to protest against its latest funding deal that could see investors wiped out, and instead support Mike Ashley’s installation as chief executive.
Sports Direct issued an announcement containing a link to a letter of protest which it encouraged shareholders to send to Debenhams.
The statement said: “Sports Direct has been contacted by a number of other shareholders in Debenhams plc regarding the protection of Debenhams shareholders’ interests and expressing their support for the appointment of Mr Mike Ashley as Debenhams CEO. Sports Direct is therefore making the template letter set out in the appendix to this announcement available on Sports Direct's website…should any shareholder in Debenhams want to use it to make their views known directly to Debenhams.”
The letter read: "As a concerned shareholder in Debenhams plc, I have watched with increasing concern the board continue to ignore the interests of its shareholders as it has sought new banking facilities from its existing lenders and noteholders.
"In particular, I was gravely concerned by your statement on 22 March 2019 where you acknowledged that under your current course of action, there was an increasing possibility that the entire equity value for the company’s current shareholders would be wiped out.
"I am therefore writing to demand that the Debenhams board takes immediate steps to install Mike Ashley as CEO, as clearly there is no time to wait for a general meeting to be called in order for this to be effected by shareholders."
The letter is the latest move in Ashley’s long running battle to take over the struggling department store chain.
Yesterday Ashley lashed out at Debenhams and its advisers after it announced a £200m refinancing deal, saying: "If there were any justice in the world the majority of the advisors would be put in prison."
The deal makes £101m available for Debenhams to draw down.
The further £99m is dependent on Sports Direct or another major shareholder making a firm offer for the retailer, including refinancing the company’s debt.
Or Sports Direct dropping its attempt to oust the Debenhams board and either agreeing to underwrite a rights issue or provide funding on terms agreed by Debenhams' lenders.
If neither of these options occur then Debenhams said the funds would be made available when the company's lenders take over the business, which would be likely to wipe out any remaining value for shareholders.
Debenhams declined to comment.
Sports Direct calls on Debenhams shareholders to protest against financing deal
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