M and G had originally disagreed with the CVAs, which would allow Debenhams to reduce rent leading to the real estate company filing a court action. Following “positive, constructive discussions”, both parties have resolved their concerns.
Terry Duddy, Debenhams chairman, said: “I am pleased that M&G has recognised the necessity for the CVAs and that as a result of the discussions we have had, it has withdrawn its challenge. I call on Sports Direct and CPC to do the same. If they do not, we will seek to have it thrown out. In the meantime, we continue to make good progress with the company’s restructuring plans.”
Debenhams was also challenged in June by former shareholder Sports Direct over its restructuring plan. Which the company believes is “completely without merit and should be dismissed.”
This CVAs were agreed with 97% and 94% of creditors respectively voting in favour of the two proposals, including over 80% of landlords in each case, after the company filed for administration in April.
Debenhams employs around 25,000 people in 166 stores across the UK, with up to a third of those closing due to restructure.