Debenhams has confirmed it is in advanced talks to borrow £150 million, just days after Mike Ashley launched an aggressive bid to seize control of the retailer.
The struggling department store chain said on Monday that it is in negotiations for the funds, £40m of which will go towards refinancing a bridging loan secured in February.
The retailer is struggling under a £500m-plus debt mountain which it is also trying to refinance, with a debt-for-equity swap or rights issue on the cards.
Part of its plans include the closure of 50 stores, potentially through a Company Voluntary Arrangement (CVA).
READ MORE: Debenhams shares spike on Mike Ashley's attempted coup
The latest twist in the saga, described as part of efforts for the shop to stay afloat, comes after Sports Direct boss Mr Ashley called for a clean sweep at the top of Debenhams and proposed installing himself as an executive.
Mr Ashley, above, tabled a proposal on Thursday night for a shareholder meeting to remove "all of the current members of the Debenhams board", other than finance chief Rachel Osborne.
Mr Ashley owns just under 30% of Debenhams through Sports Direct.
If his plans are successful, he would step down from his position as chief executive of Sports Direct, though would retain his controlling 60% stake in that company.
The shock announcement came just days after Debenhams issued its latest profit warning.
READ MORE: Debenhams shares plunge on fresh profit warning
It warned that trading headwinds, efforts to put the group on a secure financial footing and macroeconomic uncertainties are hitting the company hard. The profit alert was the fourth in just over a year.
Shares were up more than 2% in morning trade on Monday at 3.63p.
Shares plunged as construction firm Kier Group has been forced to restate its debt position after unearthing an accounting error related to property assets.
Following a review of its accounts, the company said it has identified £40.2 million of debt linked to developments that were held for re-sales, which was not included in its previously reported debt.
The company has now revised its net debt position as at December 31 2018 to £180.5m from £130m previously.
READ MORE: Distiller ramps up global sales as gin debut nears
The average month-end debt position for the six months ended December 31 was also increased to about £430m from £370m.
Shares crashed over 13 per cent in morning trade to 431p.
Kier said it remains focused on reducing its debt and expects that it will be in a cash position by June 30.
Interim results are expected to be published on March 20.
Law firm DWF has confirmed the launch of a stock market flotation, valuing the firm at £366 million.
The group said on Monday that it will raise £95.2m through the initial public offering (IPO) which will see 26 per cent of the company listed at 122p per share.
DWF's partners will share in a multimillion-pound bonanza as a result, with around £19m of the money raised going their way.
READ MORE: Morrisons to unveil profits hike despite slowing retail sales growth
Chief executive Andrew Leaitherland said: "The IPO is only the start and I am confident in DWF's strong fundamentals and continued growth prospects as a listed company."
Up to £10m of the IPO money will be invested in additional IT systems and the remainder used to fund general corporate purposes, including potential acquisitions.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article