Member Info for bistolover

Hi rubenjames. Apologies, my previous message was not directed at you as being the last darby lover, but it is obvious who it is

On PFD survival. The only way this is going to survive is to manage the finances better and still make improvements. Now that wasteful and uselessDarby is out of the way, perhaps the MD and CFO can improve the finances.

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separating the company into Groceries and Sweet Treats was one of memory basic mistakes by a CEO who only knows how to waste money that the company did not have. Debt built up from around £510m in dec 2013 to close to £600m, this was after refinancing.

Duplicating functions was costly, then more costs to undo the mistake. If the money wasting did not occur, then the debt would have been well below 3 times earning. What would the share be if debt was this low now. just think about it.

we paid money for darby to destroy shareholder value and lastremaining darby lover is still trying sing his tunes.

Darby took shareholders for a ride until oasis came and took his cookie jar away.

it was mentioned is the press in december something like mike ashley becoming ceo or chairman of debenhams, or MA suggested that to the then ceo and/or chairman around the time of his £40m loan offer, however bizarre this sounds, if it happened, then it would be an interesting journey for the PIs

darby is to blame, 100%. He was ceo when the idea was thought up. I think the price of selling was mentioned as £100m in the press. This far too low for a brand making considerable profit. If darby was ceo, he would have pushed to sell for this price, which would have been a disaster. Unless they can sell for £200m +, then best to keep it.

The damage is going to be the advisory costs, so wonder if a profit warning on the way on extra costs in 4th qtr.

additional costs mentioned so far, payoff to darby, cost of this ill thought out attempted sell.

the £40m loan is not like the existing facility, the rate will go up, most likely to credit card rates after a few weeks, so not to be spent on capex.

just trying to be a devils advocate as clearly there is something smelly in all this.

It could be debentures will have a wild party ( a joke) with this money and thus create the right condition for CVA

darby is enjoying all the ill gotten gains in west indies watching cricket. I wonder if he is taking credit for the England victory, must be all down to his magic formulae.

nobody knows the extent of the issues at debenhams, other than the forward looking statement from the company. They issued 3 profit warnings so far, so any forward looking statement needs to be taken with a pinch of salt.

It could be the company is trading profitably and just need an extra £40m to get by over the peak outgoing period, but very suspicious they could not fund out of existing facility, but has to go to the extend they have with this additional borrowing and putting the company into a bigger hole with debt.

The Group's net debt position as at 3 March 2018 was £248.2. This year at the same stage in the cash outgoing cycle they need another £40m above the debt facility of £520m, this is over £300m more.

I smell a rat, either they cannot borrow more from existing facility or the banks are already in control and are releasing enough for the next stage. Something is not right here.

the same could be said of house of fraser. MA had a 10% stake, did he say to himself, I can afford to loose the money on my 10% stake, so better buy the 90% that is not owned.

Has MA bought 100% of any company other then via admin

The 40m loan is worth a lot more to mike ashley then the shareholders holding 70% who are at the bottom of the pecking order.

There is no indication who has loaned this, if some-one like goldman sacs is behind it, then mike ashley can just buy this loan, pay a good premium, he then has control regardless of it falling into admin.

MA does not care if his 30% holding is worthless as sports direct has already written it off.

remainder

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https://www.ft.com/content/99dd7498-2ed5-11e9-8744-e7016697f225

Few other investors will buy into Debenhams shares from now on, knowing a refinancing must involve some form of equity fundraising that greatly dilutes all holdings. Analysts expect a debt-for-equity swap, but say lenders will make that conditional on Debenhams securing a company voluntary arrangement to exit leases — which can only be granted if it is pushed closer to insolvency.

And not even Mr Ashley, for all his love of department stores, can buy more Debenhams shares because that would trigger a mandatory takeover bid — and a change of control clause in Debenhams bond covenants could leave him liable to repay out-of-pocket bondholders at their full value.

Debenhams may be adopting Mr Selfridges motto: “Business as usual”. But how long before shareholders wish to utter the catchphrase of Grace Brothers’ Mr Humphries “I’m free!”

Debenhams shareholders will not be served by refinancing plan

https://www.ft.com/content/99dd7498-2ed5-11e9-8744-e7016697f225

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https://www.ft.com/content/99dd7498-2ed5-11e9-8744-e7016697f225

Selfridges, Liberty, Grace Brothers in the TV sitcom Are You Being Served?.?.?. Yes, all the truly great department stores began as personal fiefdoms, and had most success in private ownership.

Harry Gordon Selfridges London emporium spent only five years as a listed company, in the late 1990s, before regaining the title of World’s Best Department Store under the ownership of Galen Weston. Arthur Lasenby Liberty’s fabric shop was lossmaking as a plc but, having been taken private for £40m in 2010, may now be sold for £300m. Young Mr Grace did not even contemplate floating his eponymous outlet — although, given the chances of his innuendo-prone managers passing a “fit a proper and persons” test, that is understandable. If only William Debenham’s successors had so resisted the public markets.

Since the store chain’s latter-day owners launched an initial public offering in 2006, a legacy of private equity debt on top of property writedowns and falling sales has sent shares in Debenhams down 98 per cent. And, on Tuesday, investors were being served the latest instalment in the saga: a £40m extension to bank credit facilities, to buy more time for a £500m refinancing.

Debenhams seems to have calculated that £40m is just enough to see it through its spring working capital peak — when taxes, rent and rates all fall due — and avoid recourse to 29 per cent shareholder and would-be secured lender Mike Ashley, he of the Sports Direct personal fiefdom. He had, quite coincidently, also offered Debenhams a £40m loan, with strings — or, rather, shares — attached. This was rejected by the board as not being in the interests of all shareholders. Little wonder, then, that all the other shareholders thought the banks’ £40m facility more in their interest, and bid up the share price by 40 per cent.

Debenhams gave them other reasons to buy, too. A partnership with Li & Fung is set to improve the sourcing of own-brand products, lifting margins and further improving working capital. Analysts also saw it as a sign that the industry “does not regard Debenhams as a write-off” — and nor does its chief executive Sergio Bucher, despite being voted off the board by Mr Ashley.

However, the investors who bought on Tuesday may soon find themselves on their own.

Few other investors will buy into Debenhams shares from now on, knowing a refinancing must involve some form of equity fundraising that gr

or will he

https://www.theguardian.com/business/2019/feb/11/debenhams-announce-40m-short-term-cash-injection

The ultimate plan to refinance its debt is likely to include a debt for equity swap but might also involve new cash from Mike Ashley’s Sports Direct, which owns close to 30% of the company. In order to facilitate his possible involvement in a deal, Ashley is understood to have been given access to limited information about the store chain after signing a non-disclosure agreement.

reading between the lines, I am not sure if this is good for the long term, definitely good news flow for the share price for a day or so, but then reality will need to be taken into account.

1. the 40m new borrowing facility has a higher status in the pecking order and rate will go up, no mention how much or conditions. This implies the existing facility must be frozen, otherwise they could have borrowed 40m from existing facility given it is reported to be only drawn around 325m. what will happen if the financing is not completed, what rights will this group of banks who loaned 40m have on the assets. remember they halted the selling of the danish business. this loan is on suspension of covenants etc, so these must be about to breach.

2. the partnership with li and fung is a deal in principle only, not fully signed.

1. high rents that always go up, no easy way out, other than a cva
2. high debt that needs to be rolled over in a deteriorating business model. UK could be in recession later in the year.
3. mike ashley wants debenhams to go into administration and will block any move to issue new shares.

a total disgrace for being paid for failure out of funds that are required to save the company from a disastrous 6 years where the ceo not only destroyed shareholder value, but has been given a war chest of free shares paid for by suffering shareholders.

nothing to get excited. looks like JPMorgan Chase & Co giving the shares they hold back to the original holder, maybe paulson.

JPMorgan Chase & Co acquired 37,690,582 shares as on listed on RNS on 2nd october 2018.

see slide 21, debenhams indicated only 200m debt in december

https://ir.debenhams.com/static-files/fb8d0de1-556e-41d7-904e-b0b0b417830f

then it says 280m in january, so small chance they cleared in december and borrowed again in january

carpetright did, they has a cva togther with refinacing.

definition of Revolving Credit Facility

https://corporatefinanceinstitute.com/resources/knowledge/finance/revolving-credit-facility/

snippets

In other words, it is needed for companies that may sometimes have low cash balances to support their net working capital needs. Because of this, it is often considered a form of short-term financing that is usually paid off quickly

If revenues of a business drastically fall, the bank may lower the maximum amount of the revolver to protect it from default risk

This type of loan is named a revolver because once the outstanding amount is paid off, the borrower can use it over and over again. It’s a revolving cycle of withdrawing, spending, and repaying any number of times until the arrangement expires – the term of the revolver ends. This is different from an installment loan, where there are monthly fixed payments over a set period. Once an installment loan is fully paid, you can’t use it again like the revolver. The borrower has to apply for a new installment loan.

if the stores were in separate companies then smaller multiple cva might be possible.

MA has tied debenhams hands, they can't raise more money or offer equity to bond holders. so only way is for them to try and turn this around by convincing landlords by nice talking, cutting capex and more costs. May go on for another year before they fall into MA's lap