Debenhams secures £50m cash injection from creditors
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Debenhams has revealed it has secured a £50m loan facility with some of its existing lenders to help it through the busy festive period.
Following the successful consent solicitation concluded on 6 September 2019, the department store chain said the new cash injection will provide the group with an additional £50m liquidity in order to cover peak trading, in particular the weeks running up to Christmas.
Debenhams added it expects its peak (Q1) and low (Q2) inventory levels for the financial year ending August 2020 to be within the c. £450m to £270m range, based on historical trends, noting that the portion of ineligible inventory is relatively consistent across the year, with a small increase around the Christmas peak trading period.
The facility is subject to substantially the same pricing terms and utilisation mechanisms as the £200m facility the company announced in March earlier this year.
Debenhams CEO, Stefaan Vansteenkiste, said: “We are delighted that our investor consortium have reaffirmed their commitment to the business by making available additional financing support for our peak trading period.
“We are in a strong position to continue to invest in marketing and new product initiatives as we prepare for the important Christmas season.”
The news comes after the High Court last month rejected a legal challenge by funded by former shareholder Mike Ashley against the department stores planned CVA .
Debenhmas will now move ahead with its restructuring plan at the start of the new year, which will see the closure of at least 22 of Debenhams’ 166 UK stores in January 2020 and rent reductions at the majority of its remaining stores.
