Published On: Sat, Apr 6th, 2019

Sports Direct chief offers to underwrite Debenhams rescue in return for CEO job: Financial Times

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FILE PHOTO: Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, arrives at the company's AGM, at the company's headquarters in Shirebrook
FILE PHOTO: Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, arrives at the company’s AGM, at the company’s headquarters in Shirebrook, Britain, September 7, 2016. REUTERS/Darren Staples/File Photo

April 6, 2019

(Reuters) – Sports Direct chief Mike Ashley has offered to underwrite a 150 million pound ($196 million) rights issue at Debenhams on condition he is named CEO of the department store chain, the Financial Times reported on Saturday, citing two sources.

Debenhams secured 200 million pounds in new funds last week but warned that shareholders still face being wiped out unless it secures financial support from Sports Direct, which holds a near 30 percent stake.

Debenhams said Sports Direct needed to either make a firm offer for the group, underwrite a rights issue of new stock, or provide debt funding if it wanted to prevent Debenhams falling into the hands of its lenders.

In a letter to the Debenhams board dated April 5, Sports Direct said it would be willing to underwrite the group with 150 million pounds in cash if Ashley was named as CEO, the FT said.

Sports Direct was not immediately available for comment and Debenhams had no comment on the report.

Last year Sports Direct bought department store chain House of Fraser out of administration and it has been trying to wrest control of Debenhams for months to further beef up its presence in the sector.

(Reporting by Rishika Chatterjee in Bengaluru; Editing by Helen Popper and David Holmes)



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