Debenhams investors will support rights issue

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Investors in Debenhams, the retailer which bought the Principles chain earlier this month, are ready to support a rights issue at the company, should one be announced when the group delivers full-year results this week.

Nick Bubb, analyst at Pali International, said: "If recent like-for-like sales are only about 2 per cent down, implying good market share growth, they would get support from most investors. The problem over a rights issue is the weak shareholder base, with Baugur, Texas and CVC forming such a big part of the total."

But sources close to TPG, its biggest shareholder, said: "I think a rights issue would be well supported. It performed relatively well of late compared to other retailers out there."

Another investor said: "There are so many rights issues out there or in the pipeline at the moment they should do it sooner rather than later. We would support it."

Debenhams hired Lazards in January to examine the renegotiation of its £900m debt pile beyond its repayment deadline of 2011.

Results are also due this week from retailer French Connection, which is expected to show a loss, and the insurers, Prudential and Friends Provident.

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