March 25, 2019 / 8:08 AM / a month ago

Sports Direct opposes any Debenhams plan that wipes out equity

FILE PHOTO: Shoppers walk past a window display at the Debenhams department store on Oxford Street in London, Britain December 17, 2018. REUTERS/Simon Dawson/File Photo

LONDON (Reuters) - British sportswear group Sports Direct said any restructuring option pursued by Debenhams that could result in no equity value for the department store group’s shareholders “is not a workable solution”.

Debenhams said on Friday it was seeking 200 million pounds ($264 million) of additional funds from lenders, allowing it to pursue restructuring options to secure its future. It said some options would wipe out shareholders.

Sports Direct, controlled by founder and Chief Executive Mike Ashley, is Debenhams’ largest shareholder with a near 30 percent stake.

“If guidance as to what might represent a workable solution for Debenhams could result in no equity value for Debenhams’ current shareholders, from Sports Direct’s perspective and that of Debenhams’ wider stakeholders, that is not a workable solution,” Sports Direct said.

Sports Direct called on Debenhams to reconsider the offers of assistance it had made to the group, which included a 150 million pound loan and the purchase of Debenhams’ Danish business Magasin Du Nord for 100 million pounds.

($1 = 0.7590 pounds)

Reporting by James Davey; Editing by Edmund Blair

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