Control of the troubled UK retail chain Debenhams has fallen into the hands of lenders, the BBC has reported, but the store is continuing to trade.
Details around the breaking story are still being uncovered, but it was reported earlier today that Debenhams was on the brink of administration, having rejected a new offer from Sports Direct. It was a move to throw £200 million at the department store’s problems.
The BBC stated that Debenhams was likely to go into pre-pack administration, under which shops would continue trading – but the business would come under the control of its lenders. The scenario has since played out, with further details to emerge over the course of the day.
On Monday, the store rejected a £150 million offer from Mike Ashley’s Sports Direct, turned down because Ashley wanted to be chief executive.
A pre-pack administration allows a company to sell itself, or its assets, as a going concern, without affecting the operation of the business. Administrators take over the running of the business to protect creditors and shareholders lose their investments.
If Debenhams does use a pre-pack administration, Ashley’s near 30 per cent stake in the company would be wiped out.