Ashley makes another bid to prevent wipeout of equity in Debenhams

Bloomberg

Billionaire Mike Ashley made a fresh bid to prevent a wipeout of his equity in Debenhams Plc, offering to underwrite the issuance of 150 million pounds ($196 million) in new shares.
The chief executive officer of Sports Direct International Plc said his support for the shareholder rights issue is conditional on him being named CEO of the department-store chain, a request that has previously been a sticking point in negotiations. It’s one of a number of options being considered, including a cash offer that would value the retailer at about
61 million pounds, Sports Direct said in a statement.
Ashley is locked in a battle with Debenhams lenders, including banks and US hedge funds, as the company seeks to restructure about 720 million pounds of debt.
The struggling UK retailer is preparing a so-called prepackaged administration under which shareholders — including Sports Direct with a roughly 30 percent stake — would likely lose their investments. The deadline for those talks was Monday evening.
The latest offer comes after Sports Direct accused Debenhams of “a sustained program of falsehoods and denials.” In a statement, it called for board members of the department-store company to take lie-detector tests.
Debenhams declined to comment on the latest salvos from Ashley. Its shares, which have fallen almost 90 percent over the past 12 months, bounced back as much as 23 percent
in London.
The latest proposal from Ashley would be subject to Debenhams creditors agreeing to write off 148 million pounds in debt, according to the statement. It also includes the lenders swapping another 122 million pounds of debt for shares, according to a letter from Sports Direct to Debenhams.
The company has previously snubbed an offer from Ashley for a 150 million-pound interest-free loan, preferring a new financing package from creditors. Debenhams’ lenders have also repeatedly rebuffed Ashley’s attempts to be named CEO.