TIDMDEB
RNS Number : 6359V
Debenhams plc
09 April 2019
9 April 2019
FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION. THIS ANNOUNCEMENT CONTAINS PRICE
SENSITIVE INFORMATION
Debenhams plc
Administrators appointed to Debenhams plc successfully sell the
Group
Underlying business has access to GBP200m funding;
Debenhams' operations continue to trade as normal
Key points
-- Administrators have been appointed to Debenhams plc (in administration) (the "plc") only.
-- The underlying Group operating companies (the "Group") are
unaffected and all businesses are continuing to trade as
normal.
-- The Group's commercial relationships with suppliers,
employees, pension holders and customers are all with the operating
companies. Therefore, none of these stakeholders are adversely
impacted by the administration.
-- The plc Administrators have immediately sold all of plc's
ownership of the Group to a newly incorporated company controlled
by the Group's secured lenders in a pre-packaged sale (the
"Transaction").
-- The Transaction delivers continuity for all Group operations
and was in the best interests of the Group's creditors, employees,
customers, pension holders and suppliers.
-- Under its new ownership, the Group will have available to it
significant additional funding in line with the GBP200m new money
facilities announced on 29 March 2019.
-- The Group will continue to implement the restructuring of its
operations, including optimising the store portfolio (in line with
plans already communicated) to improve trading performance and
deleverage the business.
-- Trading in the shares of the plc has been suspended since
8.00 am this morning and will be cancelled with effect from 8.00 am
on 10 April 2019.
Appointment of Administrators
Debenhams plc announces the appointment of Chad Griffin, Simon
Kirkhope and Andrew Johnson of FTI Consulting LLP as joint
administrators (the "Administrators") and the completion of the
sale of the Group, other than plc, to a newly incorporated company,
controlled by its secured lenders.
Background to the Administration
The plc announced on 29 March 2019 that it has put in place New
Money Facilities with its existing lenders. These provided the
Group with GBP200m of additional funding, including GBP40m to
refinance the bridge facility announced on 12 February 2019.
As announced on 29 March 2019, the availability of the New Money
Facilities was linked to certain covenants and milestones,
including the possible provision of equity or debt financing by
Sports Direct International plc ("SDI"). While SDI has made a
number of highly conditional proposals, each of which was fully
considered by the plc board, none were deemed deliverable given
conditionality, timing and other stakeholder obligations and
considerations. As these milestones in the New Money Facilities
were not met, the Administrators were appointed.
The Administrators concluded that the Transaction was in the
best interests of the plc's creditors. Furthermore, it minimises
business disruption and provides ongoing access to funding,
ensuring continuity for the Group's operating businesses, lenders,
suppliers, employees, pension holders and customers.
Next steps for the plc
The Transaction included provisions for a Group sale process to
be launched immediately. The recovery, if any, to the plc's
shareholders will depend upon the outcome of the sale process which
must see full repayment of the Group's debt. At this stage we do
not expect that there will be a distribution to the plc's
shareholders.
The suspension of the plc's ordinary shares from listing on the
premium segment of the Official List of the Financial Conduct
Authority and from trading on the main market for listed securities
maintained by the London Stock Exchange plc took effect at 8.00am
on 9 April 2019, and the Administrators have requested the
cancellation of such listing, which is expected to take place at
8.00 am on 10 April 2019. The plc level 1 sponsored American
depositary receipt program will also be terminated following the
cancellation of the listing.
Prior to the administration, on 21 March 2019, a meeting of the
plc's shareholders had been requisitioned, under section 303 of the
Companies Act 2006, for the purpose of voting on a resolution
seeking the removal of all of the plc's directors except for Rachel
Osborne, and the appointment of Michael Ashley as Chief Executive
Officer. Following the appointment of the Administrators, this
meeting will not be called.
Next steps for Debenhams Group
The Group has undertaken a thorough review of its store estate
in the context of the current and future retail environment and
plans to proceed with a restructuring of the estate that, if
approved, will result in a significant overall reduction in the
Group's rent burden and underpin a sustainable future for the
Group. This is a critical component of the Group's restructuring
plan, and executing this is in part linked to the provision of the
GBP200m facilities and lenders implementing a GBP100m debt for
equity swap.
Terry Duddy, Debenhams' Chairman, said:
"It is disappointing to reach a conclusion that will result in
no value for our equity holders. However, this Transaction will
allow Debenhams to continue trading as normal; access the funding
we need; and proceed with executing our turnaround plans, whilst
deleveraging the Group's balance sheet. We remain focused on
protecting as many stores and jobs as possible, consistent with
establishing a sustainable store portfolio in line with our
previous guidance.
"In the meantime, our customers, colleagues, pension holders,
suppliers and landlords can be reassured that Debenhams will now be
able to move forward on a stable footing. I would like to thank
them all for their recent and continuing support."
Enquiries:
Debenhams plc (in administration) Debenhams Group
Media - FTI Consulting Katharine Wynne
Director of Investor Relations
Jonathon Brill 020 3549 6304
Ed Bridges
Tom Hufton Media - Brunswick Group
Fern Duncan Craig Breheny
020 3727 1000 Fiona Micallef-Eynaud
debenhamsplc@fticonsulting.com 020 7404 5959
debenhams@brunswickgroup.com
---------------------------------
A copy of this announcement will be made available on
Debenhams's website at
https://ir.debenhams.com/investor-overview.
-ENDS-
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END
MSCBKLFBKZFLBBD
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