Debenhams ‘set to ask for £50m extra funding’
Written by Hannah McGrath
Debenhams is reportedly on the verge of asking lenders for additional financial help tide it over through the Christmas trading period.
The struggling High Street retailer, which launched a Company Voluntary Arrangement (CVA) after collapsing into administration in April, has told its lending syndicate that it may need to access additional borrowing facilities before the winter, according to Sky News.
The company secured a £200 million lifeline in March as part of an insolvency strategy which will see the closure of 50 of its 166 stores in the UK, putting around 4,000 jobs at risk. The first round of closures is due to begin next year.
Last month, 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 that had appealed included Mike Ashley’s Sports Direct, which has been locked in a bitter battle to seize control of the retailer since its 30 per cent shareholding was wiped out as part of the CVA.
The latest appeal for financial support for trading operations had been expected for some time, Sky News reported.
Sources close to the company said it was trading within its cash targets. The company is also understood not to have fully drawn down the £200m facility agreed as part of the restructuring plan.