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“It wasn't some conspiracy or "legal robbery", it all played out pursuant to the clear rights and remedies available to the lenders and bondholders in the publicly-available terms and conditions of their debt documents. Not the board's fault if you didn't read them.”
It is the board’s fault for lying and hiding the truth in the company reports.
It is also the board’s fault for refusing MA’s proposed cash injections, which were asking only for a little bit more equity and the position of CEO. Considering the total wipeout of shareholders that happened because of the chosen pre-pack plan, it is obvious that it was in the best interest of shareholders to suffer a small dilution of their shares by accepting the interest free loan from SPD and making MA the CEO. They refused to accept the cash injection from the major shareholder which was a decision against the interest of shareholders. This is a breach of fiduciary duty. It has nothing to do with who will get the company if it goes into administration. The company should have never went into administration, because it was solvent if it accepted MA’s help.
So, i'm guessing you mean the administrators sell the shares of Debenhams PLC, but without any of the assets?
Alongside everthing else going to Celine UK Newco 1 don't you expect the brand name went as well?
I can't possible see how that could ever happen. Sell the equity of Debenhams plc wihout any assets or use of the brend name.
"As regards the shares, completely understand they are delisted, not suspended, but they formed part of the assets taken over by the administrators"
It's true they are delisted, but they aren't an asset of the new buisness. It's been touched on before, how the assets were transferred via the sale of a subsidary. The parent still exists, for the moment, alongside it's now almost valueless equity.
From the Administrators:
Immediately following our appointment, we sold the Company’s shares in Debenhams Group Holdings Limited, the top holding company for the Group’s principal operating companies, as well as certain dormant entities, together constituting the Company’s entire interest in the Debenhams group companies (“the Group”) to Celine UK Newco 1 Limited (“Newco”), an entity owned by certain of the Company’s secured lenders (the “Transaction”).
Debenhams Group Holdings Limited v Debemhams PLC
"Our strongest hope in this direction is probably the staff themselves."
True, motivating them with equity might be a good idea over the long term, but it will be equity in the new business not Debenhams PLC. The main hedge funds behind this transaction are sepecialists in distressed debt and securitization, they would have travelled this path many times before...and the issue of dealing with staff in periods of anxiety.
In the case OK Coop Banking, it's a multi year journey, I cant expect it will be any different for DEB, but the repayment of the 5.25% principal in a few years time might have an impact.
One of articles I read this morning was a highly rated US fund manager who described the process she takes, the articles on CNBC, in making an investment. Amongst the factors was deciding if to invest in the debt or equity (or both). That might be a useful thing for UK retail investors to think about, we seem addicted to equity, but as DEB shows, it's not the only horse in the race....
Thanks Knigelk. Agree with you but I'm forced to clutch at any straws available on this one.
I just can't see how MA can let this go. HOF is a disaster so he really needs to bolt on DEB to make it a going concern. Not that that matters one iota to the administrators obviously. However, it should have made him move a bit faster. Perhaps there's a lot ongoing on behind the scenes that is just not being made public at the moment?
As regards the shares, completely understand they are delisted, not suspended, but they formed part of the assets taken over by the administrators, so there is still [very much an outside] chance of them spluttering back to some sort of life if the administrators do some sort of deal including the shares. Our strongest hope in this direction is probably the staff themselves. It cannot be helping staff morale that their shares are gone, if the administrators want the staff to do their best, then advising staff that their shares built up over many loyal years are now worthless is hardly going to assist. Administrators need to realise that if you want the best from your workforce, then motivating them with equity is not a bad idea, whereas making their shares worthless is definitely a bad idea, and likely to make the administration more severe.
Unfortunately his big gamble didn't pay off. I would have thought he wanted a share of the pie but didn't want to take on the full liabilities of debs hence the reason no offer for the company was ever made. It appears the lenders protected their own position in favour of letting MA emerge as the big winner here, with them then taking the haircut. Its business as tough as it sounds and MA is hurting as all who lose money in such ventures. I was a previous shareholder and gambled here as I did with Carillion. I escaped on both fronts fortunately but was in on both for the big win. I classify individual share buying as gambling, unless you have the expertise and time to study accounts intimately. I don't. Carillion and debs were a huge lesson to me - stop looking for the needle in the haystack and just buy the market. Best of luck to all who lost here, I've lost plenty in the past looking for the needle. Too hard to find so I've given up and continue to buy the market/index funds!!
Pearls - sorry but there's a difference between suspension and delisting... if the shares were just suspended then your shares might come back.. when the shares are delisted/cancelled I can't think of any circumstances were the shares have subsequently been relisted and the shareholders had their holdings back to trade. The best case - and still unlikely - is that somehow you get compensation via any court case by SPD - again considering the debt - unlikely. The best you probably can hope for is that the directors are somehow found guilty of misleading shareholders etc. TBH MA has not yet shown any interest in taking this further (since the delisting).. he can't afford to wait if he is going down the legal route (imo)
LOL well YOU are not "moving on" are you?!! Hindsight is a wonderful thing - it was a bad investment for some - others made some profit on the spikes... the truth is that some here believe the restructuring happened sooner than necessarily (to stop SPD imho) ..that trading somehow got a lot worse far sooner than expected (re "going concern for the next 12 months in the annual accounts").. and there is an question on some of the wording within a couple of the RNSs... SPD have some explaining to do too... they should have put up or shut up... sorry but some shareholders want questions and they are entitled to ask! Personally I am pleased that the company continues and none of my local stores are affected at the moment - but when thousands are about to lose their jobs - some director heads should roll - without massive pay offs !!!
I'd like to hear more from MA. I cannot believe he is willing to lose £150m without some sort of a fight. Comments made by him earlier this month indicate a bust up is coming but it is frustrating to wait for it to come into the public arena. There is an obvious conflict of interest as exposed by MA but what us shareholders would really like to hear is that following the CVA process, that the shares re-emerge somehow.
If they could do it with Mothercare or Carpetright, I would hope it is possible here as well?
Lol I can assure you I won't be working until 90, and it certainly isn't be through "taking a punt"
Leaving that aside, the point about directors' duties and the valuation of the shares has been covered here countless times. If you don't understand why the shares are worth 0 while the Company is "still operating with a internet sales site and all stores still open", then I'm afraid I can't help you. I suggest a fundamental course in finance (there are many for free on the internet).
It wasn't some conspiracy or "legal robbery", it all played out pursuant to the clear rights and remedies available to the lenders and bondholders in the publicly-available terms and conditions of their debt documents. Not the board's fault if you didn't read them.
As a side point – "legal robbery" is a contradiction in terms. If it's legal, it isn't robbery. And if it's not robbery, it's not something to get outraged about. Accept that you made a bad investment and move on.
Very well put Jwood1. IMO if this gets to court a judge is going to see it the same way.
Personally, I am hoping for nothing for the remaining bod of Debenhams other than their P45s. Whatever you say about Mike Ashley, he is a self-made billionaire with Flannels and spd among the few bricks and mortar retailers trading on the island I live in.. In Duddy, and Adams Debenhams seem to have in place a bunch of serial failures. As for the Chief Financial Officer not even sure if she has an accountancy qualification.
Whilst I wouldn't rule out litigation completely I think we should remember that Debenhams bod their lenders will have taken legal advice throughout and you would hope have not left themselves open.
Further to this Ashley's various offers were highly conditional and none of them satisfied Debenhams stated funding requirements.
Not convinced of his retail genius, outside of piling it high, selling it cheap, buying and devaluing recognised brands a la Sports Direct I've seen little sign of any successful retail operations from him.
Happychappy spd and Mike Ashley actually have had a lot of success in the courts on various matters over the years.. They clearly have top class legal advisers. In actual fact, spd put forward several detailed suggestions to the Debenhams bod which they rejected without giving the shareholders a chance to vote. It is also possible that if the takeover code timetable had been adhered to that a formal bid would have been forthcoming. At the end of the day, some of the same incompetents who ran this company into the ground in a short space of time are still in post. I'm with the writers of various articles out there which say that it would take a rare retail genius like Ashley to turn deb's around.
HK85/KRSS
Sad to say shareholders will not see a penny no matter what happens going forward, there are no shareholders, the company you were once invested in no longer exists.
If the new business is offered for sale then MA's past shareholding will be irrelevant, he will bid equally against any other interested parties.
There was never an actual bid on the table for 5p or any other amount, MA was just posturing waving his cheque book around, he clearly never had any intention to put forward a firm bid.
SAIN
CVA button has already been pressed as of Friday, two week voting period currently underway for stakeholders.
Canterbury and the other 21 stores will close in Jan 2020.
Agreed with HK 85 , only way shareholders will know any yield is after bidding process. MA & CO shares were around 44% known or may be more on delisting, so he he will have major yield & can put highest bid, now we know why he was talking down the Company and high street all the Way. CVA will have positive impact on enterprise value. Brexit also going to divert populations reduced living cost to spending. Now see the Barrage of posts here
I suppose playing devils advocate on this one that the board could be sued for negligence. They had a deal from MA on the table at 5p per share. As this was the best scenario for shareholders should they have not recommended it?
every blessing
rev shep
The only way to recuperate some of our losses is if the company finds a bidder who is willing to pay more than its outstanding debt which is highly doubtful IMO
If the shares will be relisted after the CVA, it will be the shares in the new company which belongs to the lenders. It will not be the shares we currently have, which are now worthless.
I wouldn’t be surprised if they will relist the company, so they can sell their stolen shares to the public and find a new group of naive shareholders to steal from in the future.
The shares will not be relisted, because all the assets have been moved to a new company. The shares we have are worthless now. The company has been stolen from us. If it will prosper in the future, we will get zero from it, because the company belongs to the lenders now.
The only possible way for our shares to have any value again would be if SPD would sue the company and manage somehow to prove the fraud and reverse the pre-pack process in court. I doubt this would happen, since nothing is resolved in courts and theft is legal nowadays.
Given Mothercare and Carpetright, to name two PLC's are now trading successfully post CVA, is there any chance that these shares could do the same again one day?
Now that DEB is openly going down the CVA route, I think us scalped shareholders deserve some sort of explanation. Also, I would have thought that like him or loathe him, if the bondholders got MA onside, the chances of this company would increase in multiples. If that means conceding shares trading again, I cannot see the issue.
From what I can understand, bondholders have still not sold the business they bought from the administrators which includes all the assets of the company including its debt, shares, stock, etc. So presumably, if there is a successful CVA outcome, perhaps the shares could be relisted?
https://d27fgtedci4u6r.cloudfront.net/wp-content/uploads/2017/10/Canterbury-Debenhams-Final.pdf
This store was only sold last August.The rent has just ratcheted up to £1.5 m pa last month -Ouch
The first wave of closures sounds very much a taster before the CVA button is pressed They certainly wont want to be paying out £375k in June for nothing on this closed store
[Although a few weeks ago we...had to...pursue certain procedures...to keep the business...on track....we were...er, pleased...to have completed this...successfully...and]...
"Debenhams is an attractive and cash generative business"...
[just like we said it was a little while ago. The changes to our 'corporate structure' in early April should...not concern potential bidders. These changes were...of a technical nature... and did not effect our operations].
Er Hello BoD! Do you remember us? We had this thing called equity which we bought from you. You used the money to do stuff; without it, the business wouldn't have existed. Except you done such a bad job that you lost all the equity to an insolvency process. You are responsible for that. Your fault.
But you kept stringing us along. You never said how bad it was or was likely to become; but it was you causing it to fail! Could you spare just a word for us? You know about the hundreds of millions you cost us? And why you thought it was okay to say it was okay when it wasn't? Can't wait for you to explain.
Danial the great knower of all things of course they were legally robbed and warned on this billboard ROFL give us a break it’s good your on here worrying about our money but if you never take a punt you will never retire and be working until your 90 for gods sake but prepare to lose what you can afford and move on to the next one.