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Department store Debenhams has confirmed Sports Direct is among the parties which have sent applications to challenge its CVA which was voted through by creditors on 9 May.
Debenhams went under the control of its lenders when it entered a pre-pack administration in April. Debenhams Group Holdings Limited, its subsidiaries and certain dormant companies, which together make up the Debenhams Group, were transferred to the ownership of Celine UK NewCo 1 Ltd.
The administration followed Debenhams’ rejection of Sports Direct’s offer to underwrite £150m equity issuance. It also meant Sports Direct would have its 30% stake in the department store wiped out leading Sports Direct owner Mike Ashley to criticise the department store’s advisors, saying they should be “put in prison”.
In a statement released to the London Stock Exchange on 11 June, Terry Duddy, Debenhams executive chairman, said: “We believe the challenges to the CVAs to be without merit and will vigorously defend them. Given the overwhelming support for the proposals from creditors, including over 80% of landlords, this is an unnecessary distraction as we implement our restructuring plans.”
A spokesperson for Celine UK NewCo 1 Ltd, added: “We note the spurious challenges to Debenhams’ CVA proposals, which were approved by the vast majority of landlords and more than 90% of all creditors. We will move forward with our debt restructuring process as expected. The CVA provides a platform to deliver a turnaround in the business for which the lending group has committed £200m of new funding and remains supportive.”
