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Debenhams shareholders ‘backing Mike Ashley as CEO’

Sports Direct has been contacted by shareholders in Debenhams, expressing their support for the appointment of Mike Ashley as its CEO, the company has said.

The sports goods chain has also stated that the same shareholders have been in contact regarding the protection of their interests in the department store chain.

Sports Direct has created a template letter for shareholders in Debenhams to use is they wish to express these views to Debenhams directly.

At the same time, reports have emerged that Ashley, CEO of Sports Direct, has sent around 25 legal letters detailing “serious allegations of wrongdoing” to senior directors at Debenhams, in a bid to delay its refinancing plans. The letters were sent between March 7th and March 27th.

Both Debenhams and Sports Direct are yet to comment.

It all comes after Debenhams agreed a £200 million refinancing deal with its existing lenders last week, leaving the door open for Sports Direct to formally table an offer. The department store chain expected to receive thee first £101m on Friday.

The remaining £99m is conditional on Sports Direct or another major shareholder making a “firm and binding offer” for Debenhams, which must include an agreement to refinance its group debt, amounting to £560m.

Alternatively, Sports Direct could provide funding for Debenhams in the form of equity or a loan known as a “subordinated debt instrument”, and cancel its request for an extraordinary general meeting to appoint Ashley as CEO of the retailer.

If neither happens by 8 April, Debenhams will enter a pre-pack administration.

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