LONDON (Alliance News) - Debenhams PLC on Thursday said that a majority of its noteholders agreed to the amendments proposed last week, allowing the department store operator to proceed with a proposed GBP200 million fundraise.
Debenhams shares were trading 17% lower at 2.32 pence each on Thursday morning.
The company said that the requisite consent level was achieved hours before the solicitations process was due to close.
The conclusion of the solicitation process suggests a potential end to Sports Direct International PLC's plans to acquire the struggling retailer.
Sports Direct, which holds a 29% stake in Debenhams, on Wednesday priced a potential offer for the remaining shares of Debenhams it does not hold at 5p each, valuing the firm GBP61.4 million.
The offer however was conditional on on Debenhams terminating the noteholder consent solicitation process as well as appointing Sports Direct boss Mike Ashley to its own board in the role of chief executive officer.
In addition, Sports Direct said the possible offer is pre-conditional upon Debenhams agreeing not to enter into any third party funding arrangements, granting any new security over any of its assets or entering into administration, CVA or other insolvency processes.
Sports Direct shares were 0.6% higher at 287.30p in morning trade.
Denehams launched the consent solicitation with holders of its 5.25% senior notes due 2021 last Friday, in order to seek permission to conduct the fundraise by amending the terms of its loan notes.
Back then, the retailer had said that the amendments to the notes would allow the company to secure new money providing liquidity headroom for Debenhams' future funding needs and delivering stability.
Among the changes that were proposed, Debenhams was seeking permissions to allow the company to put in place new money facilities on a secured basis of up to GBP200 million from its existing lenders and noteholders.
It was also seeking to put in place inter creditor arrangements, as well as securing waivers and amendments to the notes that are a condition to putting in place the new money facilities.
A consent fee of 0.75% of the outstanding principal amount of the notes has also been offered to holders who vote before the expiration of the solicitation process, Debenhams added.
Earlier in March, Debenhams said it was in "advanced negotiations" with its lenders for approximately GBP150 million of additional facilities. Of the total, GBP40 million is to be used in order to refinance its bridge facility secured in mid-February.
