TOP NEWS: Debenhams Shares Jump On GBP40 Million Cash Injection

LONDON (Alliance News) - Debenhams PLC on Tuesday said it has secured an extension to its credit ...

Alliance News 12 February, 2019 | 8:31AM
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LONDON (Alliance News) - Debenhams PLC on Tuesday said it has secured an extension to its credit facilities and inked a sourcing partnership with Li & Fung, a Hong Kong-based supply chain manager primarily for US and EU retail chains.

Shares in Debenhams were 39% higher at 4.36 pence each in morning trade, one of the top gainers in London.

The struggling department store chain has agreed a new GBP40 million credit facility for 12 months with its existing lenders, it said. The new loan fully utilises permissions within the terms of the company's current revolving credit facility and loan notes.

The retailer said the new loan facility will act as a bridge to facilitate a broader refinancing and recapitalisation, and the company is continuing to engage constructively to conclude a comprehensive refinancing.

The sourcing partnership with Li & Fung is expected to cover a material part of the company's own-brand sourcing over time. Debenhams expects the agreement to will deliver benefits through improved product quality and lead-times, higher margins and better working capital efficiency.

"Today's announcement represents the first step in our refinancing process. The support of our lenders for our turnaround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders, and deliver a sustainable and profitable future for Debenhams," Debenhams Chief Executive Sergio Bucher said.

"In addition, the partnership agreement we are announcing today with Li & Fung will be a key part of our turnaround plan. This will help us anticipate and respond more quickly to trends and our customers' preferences, as well as delivering better quality product," Bucher added.

In January, Debenhams said it was in talks with lenders over new financing amid weak store footfall over the key Christmas trading period. The company recorded 3.6% drop in UK same store sales for the six weeks to January 5.

By Tapan Panchal; tapanpanchal@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Debenhams PLC 3.28 GBX -2.13 -
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