Economy

Ashley's share issue plan rejected by Debenhams

Ashley's share issue plan rejected by Debenhams

Mr Ashley has been battling to prevent this outcome but a series of overtures towards Debenhams, all of which involve him taking the job of chief executive, have been rejected.

The company, which had 19 million customers and 2.9 billion pounds in sales past year, has said it needs to refinance its balance sheet and restructure the business to make it more sustainable. Owning 30 percent of the group, he has already forced the chairman out of the company and the CEO off the board.

The business has until 5pm on 22 April 2019 to announce either a firm intention to make an offer for Debenhams or that it does not intend to.

The decision of Debenhams' board to reject the offer was confirmed in a statement this afternoon.

The department store has stipulated four conditions it would require Mr Ashley to fulfil for it to consider asking lenders to extend its refinancing deadline on Monday.

Pre-pack administration is typically a court-based process which can allow creditors to take control in a pre-agreed plan while the company continues to operate as normal.

"Ashley becoming CEO is a major sticking point for the lenders; there is a major trust deficit here", the source said, declining to be named because the talks are private.

Street in Arc leading up to Debenhams.

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The Newcastle United owner claimed he had taken a lie detector test to prove he was telling the truth about the details of a disputed meeting with the retailer.

For its part, Sports Direct said Debenhams and its advisers had undertaken a "sustained programme of falsehoods and denials" and called on board members Terry Duddy and David Adams to take a lie detector test.

Ashley's Sports Direct already owns very almost 30 per cent of Debenhams, although the chain is in the final stages of doing a deal with its lenders that would hand banks and hedge funds ownership of its assets - in return for writing off its debts.

Laith Khalaf, senior analyst at Hargreaves Lansdown, fears lenders won't back Ashley's latest bid, saying the conditions are too costly.

As well as Sports Direct, Mr Ashley runs House of Fraser, Evans Cycles and Flannels.

Russ Mould, investment director at AJ Bell, said: 'Ashley's no-nonsense approach to business has likely been a significant factor in the creation of his retail empire.

Ashley already owns almost 30 per cent of Debenhams, and has called for an investigation into the firm's management.