Debenhams has confirmed it is in advanced talks to borrow £150 million as part of efforts to stay afloat, just days after Mike Ashley launched an aggressive bid to seize control of the retailer.
The struggling department store chain said on Monday that it is in negotiations for the funds, £40 million of which will go towards refinancing a bridging loan secured in February.
The retailer is struggling under a £500 million-plus debt mountain which it is also trying to refinance, with a debt-for-equity swap or rights issue on the cards.
Part of its plans include the closure of 50 stores, potentially through a Company Voluntary Arrangement (CVA).
The latest twist in the saga comes after Sports Direct boss Mr Ashley called for a clean sweep at the top of Debenhams and proposed installing himself as an executive.
Mr Ashley tabled a proposal on Thursday night for a shareholder meeting to remove “all of the current members of the Debenhams board”, other than finance chief Rachel Osborne.
Mr Ashley owns just under 30% of Debenhams through Sports Direct.
If his plans are successful, he would step down from his position as chief executive of Sports Direct, though would retain his controlling 60% stake in that company.
The shock announcement came just days after Debenhams issued its latest profit warning.
It warned that trading headwinds, efforts to put the group on a secure financial footing and macroeconomic uncertainties are hitting the company hard. The profit alert was the fourth in just over a year.
Shares were up more than 2% in morning trade on Monday at 3.63p.