Debenhams remains in hands of landlords and hedge funds after no buyer found

Sales process fails to attract acceptable bids leaving consortium of landlords, banks and other creditors in control 

Debenhams will now seek to press ahead with plans to close 50 stores over three years putting 4,000 jobs at risk
Debenhams will now seek to press ahead with plans to close 50 stores over three years putting 4,000 jobs at risk

Debenhams will remain in the hands of a group of hedge funds, landlords and banks after no acceptable bids came forward for the beleaguered department store chain.

Administrators FTI Consulting said it had rejected all bids received as they were “not at the level required to be taken forward”.

The consortium of creditors operating under the name Celine, which includes Barclays and US hedge fund Silver Point Capital, took control of Debenhams after it went into a so-called pre-pack administration last month. A sales process was expected to find a suitable new owner but one has yet to emerge.

Celine said on Thursday that it was a “committed long-term owner” and has provided Debenhams with £200m in new funding.

It is understood Mike Ashley's Sports Direct, which owned a 29 per cent stake in Debenhams and previously led a combative campaign to take control was not one of the bidders.

Mr Ashley saw his stake wiped out along with other shareholders last month when the administrators were called in.

Stefaan Vansteenkiste, representing Celine, said: “The investor consortium is a committed long-term owner, which has provided Debenhams with £200m in fresh funding for the financial restructuring process and to fund the company's operating turnaround.

“Within the consortium, there is extensive turnaround experience, which we will deploy to support the management's plan and to position Debenhams for a long-term successful future.”

Debenhams will now aim to move forward with a plan to close 22 stores, slash rents, and cut up to 1,200 jobs this year. Fifty stores are earmarked for closure over the next three years.

The company needs approval from 75 per cent of creditors, including landlords, to back the plans in a vote later on Thursday.

Debenhams is also pushing for councils to slash its business rates bills by half.

John Webber, head of business rates at property firm Colliers International, said: “It is akin to going with a begging bowl to the person who has just robbed you – asking local authorities to grant business rates reductions – and these reductions if granted are only likely to last for a year, and as they are discretionary relief, could easily fall foul of state aid limits."

“What is ridiculous is that a 50 per cent plus business rates tax is part of the reason that Debenhams is going through a CVA [company voluntary arrangement]. So, in effect they are asking for mercy from the perpetrator of their desperate state."

Debenhams executive chairman Terry Duddy said: “I am pleased that our new owners have confirmed their commitment to Debenhams and remain supportive of our plans to restructure the business.

“We are confident that we will receive support for our CVA proposals, which make sense for all parties, and will give us the platform to deliver a turnaround.”

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