British retail chain Debenhams has confirmed it has secured a £40 million lifeline from lenders and a deal with a major supplier to improve the quality of its own-label clothing. The loan 12 months would ‘facilitate a broader refinancing and recapitalisation’ and the company is talking to stakeholders and would conclude a comprehensive refinancing, it said.
Analysts reportedly termed the deal with supplier Li & Fung, a Hong Kong-based conglomerate that makes clothing for many British retailers, significant.British retail chain Debenhams has confirmed it has secured a £40 million lifeline from lenders and a deal with a major supplier to improve the quality of its own-label clothing. The loan 12 months would 'facilitate a broader refinancing and recapitalisation' and the company is talking to stakeholders and would conclude a comprehensive refinancing, it said.#
Once Britain’s biggest department store chain, Debenhams has been struggling with net debts of almost £300 million and plans to close 50 underperforming stores, putting about 4,000 jobs at risk.
Debenhams’ future depends on it being able to finalise the refinancing of £520 million in debt facilities, which are due to be repaid next year, British media reports quoted analysts as saying.
Deterioration in the UK economy isn’t going to help the company either.
Debenhams seeking to raise money from shareholders, including Mike Ashley’s Sports Direct, which owns close to 30 per cent of the company, is also possible. (DS)
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