A letter has now surfaced which reveals that retail billionaire Mike Ashley was rebuffed by Debenhams after he offered a £40m loan to its chief executive Sergio Bucher amid speculation that the chain had “zero chance of survival”.
Details of the letter, first reported by the Daily Telegraph, emerged as Sports Direct reported a 27 per cent fall in half-year profits.
In his letter to Bucher, Ashley pointed to speculation about Debenhams’ difficulties with suppliers and credit insurance and that “additionally it is speculated that the company currently has zero chance of survival”.
“What we are offering is a very public statement of support at a critical time for the Debenhams business,” he wrote.
To this, Debenhams stated: “We welcome Sports Direct’s proposal as a clear demonstration of their willingness to support the company.
“However, as the offer came with conditions that could affect the interests of other stakeholders, while the board does not think it could accept the proposal, as presented, it has invited Sports Direct to engage as part of our broader refinancing process.”
This is a copy of the letter Mike Ashley sent to @Debenhams yesterday proposing an interest free loan of £40 million in return for increased stake. Debenhams said no. “It’s like being offered Messi on loan and turning it down” said Ashley. pic.twitter.com/hPy0SS0hck
— Joel Hills (@ITVJoel) December 13, 2018