Ball back in Sports Direct’s court as battle for Debenhams intensifies

Debenhams has gone ahead with its £200m refinancing plan, but its lenders have issued an ultimatum to Sports Direct to either make a firm bid for the struggling department store, or face it going under.

Debenhams has said that half of the refinancing deal is conditional on Shirebrook-based Sports Direct pressing on with a “firm and binding offer” and make arrangements to refinance the department store’s crippling £560m debt or to finance a rights issue or provide finance.

It Sports Direct failed to do this, the cash would only be available to Debenhams if it was transferred to a “lender-approved” entity which would “result in no equity value for the shareholders”. Reports suggest this would mean Debenhams would be sold in a pre-pack deal to the current bondholders.

Earlier this week, Debenhams secured the support of the majority of its bondholders to go ahead with a £200m refinancing plan – a deal which has scuppered Ashley’s plans to become the struggling retailer’s new boss.

Earlier, Mike Ashley launched a vicious attack, saying: “Now the results of the vote are known and we have also been subsequently advised that the supportive HSBC are no longer part of Debenhams RCF, I think that if there were any justice in the world the majority of the advisors would be put in prison.”