Apr 6, 2019
Ashley offers to underwrite Debenhams rights issue
Mike Ashley has offered to underwrite a £150m rights issue at Debenhams in a dramatic last-minute intervention in the battle over the struggling department store group, two people briefed on the matter said. In a letter to the board of Debenhams dated April 5, Sports Direct said it would be prepared to underwrite a £150m cash call but maintained its previous demand that Mr Ashley, the billionaire founder of Sports Direct, be made chief executive of Debenhams. The creditors had effectively challenged Sports Direct, which already owns 29 per cent of Debenhams' equity, to either make a bid for the rest or underwrite a £200m rights issue. The proposal is the latest in a series of offers that Mr Ashley has made to Debenhams. Debenhams argues that because Sports Direct controls House of Fraser, which it regards as a direct rival, Mr Ashley should not be allowed to run Debenhams at the same time - even though he has indicated he would step down as chief executive of Sports Direct.
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