Sports Direct offers to underwrite a £150m equity issuance by Debenhams

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Sports Direct has confirmed that it has offered to underwrite a £150 million equity issuance by Debenhams. The offer has been made on the condition that Mike Ashley, owner, becomes CEO of Debenhams.

In a statement Sports Direct has said that it “continues to seek to constructively engage with the Debenhams board and, as one of a number of potential options under consideration, it has made a proposal to Debenhams under which Sports Direct would underwrite a £150 million pre-emptive equity issuance to existing Debenhams shareholders.”

The retailer continued: “The Equity Issuance, which would form part of a comprehensive refinancing of Debenhams, is subject to a number of conditions, all of which Sports Direct believes should be deliverable with the co-operation of Debenhams and its existing lenders, including the appointment of Mr Mike Ashley as Debenhams’ CEO and Debenhams’ lenders agreeing to write-off (in aggregate) £148 million of Debenhams debt. 

“Sports Direct also wishes to confirm that, in addition to consideration of the Equity Issuance, it continues to give active consideration to its pre-conditional possible offer for Debenhams at 5p in cash per ordinary share announced on 25 March 2019.

“Whilst Sports Direct continues to actively evaluate all possible options to support Debenhams, it wishes to clarify that, as a technical matter, were it to complete, the Equity Issuance would be an alternative transaction to the Possible Offer and vice versa.”