British multinational retailer, Debenhams, has been taken over by its lenders, after months of financial struggles.
As reported by Toy World, all shareholders – including Sports Direct's founder Mike Ashley, who held a 30 per cent stake in the business and had placed bids on the retailer in an attempt to save it and install himself as chief executive – have lost their shares in the business.
The 165 outlets will continue to trade as normal under a pre-pack deal which only affects the listed holding company. Debenhams' operation companies have been sold to the group's lenders, in return for reducing its whopping £620m ($1.1 billion AUD) debt and injection of £100m to help keep the business afloat.
The group's lenders want to close up to 50 stores via a company voluntary arrangement, which must be first approved by landlords.
Debenhams’ chairman, Terry Duddy, said that the situation is disappointing for equity holders.
“It is disappointing to reach a conclusion that will result in no value for our equity holders. However, this transaction will allow Debenhams to continue trading as normal,” he said.
The announcement was made on 09 April.