Debenhams has said it will give “careful consideration” to a 150 million pound interest-free loan offered to the company by Mike Ashley’s Sports Direct.
The loan was offered in a statement by Sports Direct on Wednesday, and would involve the company getting an additional 5 percent stake in Debenhams, as well as the appointment of Ashley as CEO. If these conditions were met, Sports Direct said the loan would be “guaranteed to be interest-free.” If not, the loan would bear interest at 3 percent.
Responding to the offer in its own statement on Thursday, Debenhams said that its board would “give careful consideration to the proposal and will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties.”
Sports Direct said that 40 million pounds of the loan would be used to refinance the 40 million pound cash injection that Debenhams secured in February.
The offer would be an alternative to the 150 million pound loan Debenhams said last week it was negotiating with existing lenders. Sports Direct's proposed 5 percent extra stake in Debenhams would increasse its shareholding to around 35 percent.
Photo credit: FashionUnited