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Sports Direct chief offers to underwrite Debenhams rescue in return for CEO job - FT

Sports Direct chief offers to underwrite Debenhams rescue in return for CEO job - FT
FILE PHOTO: Mike Ashley, founder and majority shareholder of sportwear retailer Sports Direct, arrives at the company's AGM, at the company's headquarters in Shirebrook, Britain, September 7, 2016. REUTERS/Darren Staples/File Photo   -   Copyright  Darren Staples(Reuters)
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(Reuters) – Sports Direct chief executive Mike Ashley has offered to underwrite a 150 million pound rights issue at Debenhams on condition that he is named CEO of the department store chain, the Financial Times reported on Saturday, citing two sources.

Debenhams secured 200 million pounds in new funds last week but warned shareholders that it still faced being wiped out unless it secured financial support from Sports Direct, which holds a near 30 percent stake.

Debenhams said Sports Direct needed to either make a firm offer for the group, underwrite a rights issue, or provide debt funding if it wanted to prevent Debenhams’ ownership falling into the hands of lenders.

In a letter to the Debenhams board dated April 5, Sports Direct said it would be willing to underwrite 150 million pounds in cash if Ashley was appointed as Debenhams’ new chief executive, the FT said.

Sports Direct was not immediately available for a comment and Debenhams declined to comment on the report.

Last year, Sports Direct bought department store chain House of Fraser out of administration and has been trying to wrest control of Debenhams for months.

(Reporting by Rishika Chatterjee in Bengaluru; Editing by Helen Popper)

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