Ashley launches last ditch Debenhams’ CVA challenge
Written by Hannah McGrath
Mike Ashley’s Sports Direct has launched a last minute challenge to Debenhams’ restructuring plan.
Sports Direct saw its 30 per cent share in Debenhams wiped out when the company won the required backing of 75 per cent creditors to launch a Company Voluntary Arrangement (CVA) in April.
The company fell into the hands of its lenders as part of the £200 million financial lifeline and restructuring deal, which involved plans to cut rents and close up to 50 stores.
Yesterday, the consortium which now owns Debenhams, operating under the name Celine UK Newco, said it had received challenges to the CVA on the last day of the 28-day period for appeals against the insolvency process. Those which had appeal included Sports Direct, Debenhams confirmed.
Responding to the move - the latest salvo in Ashley’s bitter struggle to seize control of Debenhams - Terry Duddy, executive chairman of Debenhams, said: “We believe the challenges to the CVAs to be without merit and will vigorously defend them.”
He continued: “Given the overwhelming support for the proposals from creditors, including over 80 per cent of landlords, this is an unnecessary distraction as we implement our restructuring plans."
A spokesperson for Celine UK NewCo described the challenges as “spurious” and vowed to forge ahead with the turnaround plan. “The CVA provides a platform to deliver a turnaround in the business for which the lending group has committed £200 million of new funding and remains supportive.”
Sports Direct has not responded to a request for comment.