Uncertain future for staff as Debenhams on edge of administration

Debenhams rejects €175m rescue bid

Sports Direct owner Mike Ashley has launched a scathing attack on the board of Debenhams this afternoon as the British high street stalwart fell into administration.

The rejection of the rescue package means Debenhams is likely to go into pre-pack administration.

The new ownership consortium is led by hedge funds Silver Point Capital and GoldenTree, which built strong positions by buying up Debenhams' bond debt.

The Ipswich Debenhams is the largest store in the town centre, and many see it as vital for the regeneration of the area - and the company signed a 125-year-lease on the building only six years ago.

The restructuring will be brought about through a Company Voluntary Arrangement (CVA), which have been favoured in recent years as shops close stores.

FTI Consulting has been appointed to carry out the process but the firm insisted that stores will continue to trade as normal.

Earlier today, the high street chain fell under the control of its lenders after rejecting a £200million lifeline offer from Sports Direct.

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Hargreaves Lansdown analyst Laith Khalaf said it had been downhill for the group since it floated on the stock market - for the third time - in 2006.

Lenders to Debenhams said the latest proposal, on the terms set out, including that Mr Ashley be made chief executive of the chain, was "not sufficient".

Mr Ashley's attempts to take over Debenhams have resulted in him demanding that the board be investigated, two members to undergo lie detector tests and trading in its shares to be suspended.

Mr Duddy added: "We remain focused on protecting as many stores as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance".

The company said in an earlier statement this morning: "The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of 9 April, which indicated a willingness of Sports Direct to underwrite an equity issue of £200 million".

'In the meantime, our customers, colleagues, pension holders, suppliers and landlords can be reassured that Debenhams will now be able to move forward on a stable footing.

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