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Alwayswinning i can easily discount your point 1 & 2. If you call a 12% loan a far better deal i take it you’re posting from Zimbabwe and not the UK. The BOD wanted MA to cancel the EGM because it puts them at jeopardy of losing their jobs. MA proposal in the rights issue was to be made ceo there was no mention of him seeking to sack the bod anymore. At the end of the day and I’ll leave it to your rational if the bod were to choose between themselves or sergio who do u reckon will go?
Dazza1970 I suggest you stop reading articles upside down.
Mike Ashley has offered to underwrite a ÂŁ150m rights issue at Debenhams in a dramatic last-minute intervention in the battle over the struggling department store group, two people briefed on the matter said.
In a letter to the board of Debenhams dated April 5, Sports Direct said it would be prepared to underwrite a ÂŁ150m cash call but maintained its previous demand that Mr Ashley, the billionaire founder of Sports Direct, be made chief executive of Debenhams.
The department store group has not yet formally responded to the offer, but the intervention makes it likely that the April 8 deadline for Mr Ashley to declare his intentions will be extended. The creditors had effectively challenged Sports Direct, which already owns 29 per cent of Debenhams’ equity, to either make a bid for the rest or underwrite a £200m rights issue.
The proposal is the latest in a series of offers that Mr Ashley has made to Debenhams. Over the past month, Sports Direct has offered to lend the company ÂŁ150m, acquire its Danish operation for at least ÂŁ100m, or potentially launch a 5p a share takeover bid for all the remaining equity. No price has been indicated for the rights issue.
The offer would require the agreement of the group’s creditors, with whom Debenhams has agreed a separate refinancing plan entailing a pre-pack administration of the company that would render its equity worthless.
The creditors include both European institutions and US-based hedge funds such as Silverpoint Capital.
Most of Sports Direct’s overtures have been conditional on Mr Ashley being made chief executive, a move that both Debenhams and its creditors have resisted. Debenhams argues that because Sports Direct controls House of Fraser, which it regards as a direct rival, Mr Ashley should not be allowed to run Debenhams at the same time — even though he has indicated he would step down as chief executive of Sports Direct.
Debenhams’ plight has worsened this year as trading weakened, and the withdrawal of its trade credit insurance cover forced it to increase working capital. In February, it secured an additional £40m from its lenders in a deal that significantly increased their influence over the company.
If it proceeds with the creditor-backed refinancing, it is expected the company would implement a company voluntary arrangement to close around 50 stores and reduce rents or lease lengths at others. Mr Ashley and his team have previously said that only a few stores need to close.
Krss if a rights issue is approved what some posters here are failing to mention is that all shareholders will be issued shares for a predetermined period which they can sell through the auction, do nothing and let it expire and exercise their right and buy them
Alwayswinning - that was your post yesterday at 14:45
“I am almost certain all negotiations ended a while ago. MA is IMO now just sitting twiddling his stumpy thumbs having spat his dummy out of his fat head waiting for Debenhams Doomsday in 40 hours and 15 minutes”.
A couple of hours later the media breaks the news that MA is proposing a £150M rights issue. I would suggest that you change your username to crystal ball instead of alwayswinning since you know happen to know what’s going around in MA’s head
Pokerchips my understanding of rights issue I will dilute the value of the share price in the short to medium run but the amount of the shares held will remain the same. I may be right or wrong and will be appreciative if someone can give the correct answer
Pokerchips your right about what you’ve mentioned regarding the share dilution however shareholder should either live with that fact or see their holding totally wiped out. In your opinion which option is more sound for shareholders
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https://www.ft.com/content/52a40810-5876-11e9-9dde-7aedca0a081a
Mike Ashley has offered to underwrite a ÂŁ150m rights issue at Debenhams in a dramatic last-minute intervention in the battle over the struggling department store group, two people briefed on the matter said.
In a letter to the board of Debenhams dated April 5, Sports Direct said it would be prepared to underwrite a ÂŁ150m cash call but maintained its previous demand that Mr Ashley, the billionaire founder of Sports Direct, be made chief executive of Debenhams.Â
The department store group has not yet formally responded to the offer, but the intervention makes it likely that the April 8 deadline for Mr Ashley to declare his intentions will be extended. The creditors had effectively challenged Sports Direct, which already owns 29 per cent of Debenhams’ equity, to either make a bid for the rest or underwrite a ÂŁ200m rights issue.Â
The proposal is the latest in a series of offers that Mr Ashley has made to Debenhams. Over the past month, Sports Direct has offered to lend the company £150m, acquire its Danish operation for at least £100m, or potentially launch a 5p a share takeover bid for all the remaining equity. No price has been indicated for the rights issue.
The offer would require the agreement of the group’s creditors, with whom Debenhams has agreed a separate refinancing plan entailing a pre-pack administration of the company that would render its equity worthless.
The creditors include both European institutions and US-based hedge funds such as Silverpoint Capital.Â
Most of Sports Direct’s overtures have been conditional on Mr Ashley being made chief executive, a move that both Debenhams and its creditors have resisted. Debenhams argues that because Sports Direct controls House of Fraser, which it regards as a direct rival, Mr Ashley should not be allowed to run Debenhams at the same time — even though he has indicated he would step down as chief executive of Sports Direct.Â
Debenhams’ plight has worsened this year as trading weakened, and the withdrawal of its trade credit insurance cover forced it to increase working capital. In February, it secured an additional ÂŁ40m from its lenders in a deal that significantly increased their influence over the company.Â
If it proceeds with the creditor-backed refinancing, it is expected the company would implement a company voluntary arrangement to close around 50 stores and reduce rents or lease lengths at others. Mr Ashley and his team have previously said that only a few stores need to close.
Warik take it easy esc wants to know why they hired 3000 staff at 70k.
Esc Company.Secretariat@debenhams.com get in touch with deb and find out
Jwood tulow oil went through a rights issue in 2017 and the SP dropped in the short run and it’s currently trading at a much higher level than it was trading before the rights issue took place. The same amount of anyone holding won’t get affected but the SP will drop in the short due to the new issue should it recover or not let’s leave that to the market to decide. Before any of us jump to a conclusion let’s see of the deal is going to be approved
Esecallum they are talking from the perspective of share dilution as there will be more shares issued the price of the current shares will drop
I hope all parties reach a conclusion, after all I’m not one of the top investor in DEB and seeing a dilution won’t make much of a difference to me
Warik looks like you’re right let’s see how the events will turn
Warik I’m just not too sure anymore it’s been an extreme case to deal with. The options given by the BOD included a subordinated loan he could have chosen it but his ultimate goal is to acquire DEB which in the meantime comes at a very high cost. One thing for sure he is a very stubborn person with too much ego and unfortunately those two things won’t help him, it’s time for him to compromise and realise ousting the BOD won’t happen anytime soon and that his safest and cheapest path is the participation in the subordinated loan
Sorry mycar I meant to say Monday
Warik the situation is turning into a circus, I’m fully aware that he can strike an 11th hour deal but his latest actions is saying otherwise, instead of going into serious negotiations one day we hear he’s asking other shareholders to send letters to DEB about our concerns and yesterday he’s threatening to take legal actions. The missed point in here is that the BOD wouldn’t dare taking an action that would result in wiping shareholders unless they attained legal advice beforehand
Worldgoround tomorrow is the deadline either they give him an extension to explore more his options which I highly doubt or the company gets delisted which is prevailing at the moment
Seac it’s not as easy as you think sometimes people have to realise that they lost and MA threatening that he will pursue legal actions against individual BOD is a sign that he has reached a dead end in his negotiations with the BOD
Meta I have already written off my holdings it’s a headache tbh and was one shi*y investment i went for.
If the company was going down due to financial factors it’s something I have to put up with and call it a day. But don’t tell me in your 5 January RNS that everything was ok and we are in line with our strategy of cost cutting.... and then the moment MA wants to oust them a SH wipe out is their alternative route
Meta - Financial institution shareholders account to circa 64% of the company’s total issued shares don’t you think the BOD owes them an explanation to why the situation has deteriorated so quickly and what has changed from the 5 January to the 22 March that now a wipe out is the likely outcome
Mycar - we are all in the same boat but I’m sorry to say that I’m no longer optimistic. DEB announced in January that they will initiate finance restructuring negotiations with its lenders 12 months before the RCF was due and almost 2 years before their 5.25% notes were due and yet they agreed to take on more funding at 12% after 3 months instead. All what the BOD has been doing is misleading the SH and working against us to save their positions