Debenhams CVA proposal aired
There has been no delay in Debenhams presenting creditors with its CVA proposals. It has earmarked an initial swathe of stores that it wants to close, some rather sooner than originally expected. The 22 locations cover the length of the UK, including Kirkcaldy, Eastbourne, Witney, Wimbledon, Southport and Birmingham Fort and will affect some 1200 employees, who we understand have been advised of the plans. The retailer is also seeking rent reductions and/or lease term re-negotiations at 105 other stores and will be looking to further consolidate its warehouse operations.
In an official statement, Terry Duddy, executive chairman of Debenhams said: "The CVA is part of the company's restructuring and turnaround plan. In conjunction with this, certain of the group's financial creditors recently provided £200m of fresh liquidity and have committed to equitise £100m of debt. Value recovery for shareholders of Debenhams plc is expected to be nil.
"The CVA proposals provide a mechanism to restructure the store estate in line with the plan outlined by management in October 2018 to reduce the 166 UK store portfolio by closing around 50 stores. The first stage of that programme proposes up to 22 store closures in 2020".
The consortium which acquired Debenhams paid £101.8 million and assumed £520 million of debts and pension obligations.