Debenhams owner on brink of administration

Debenhams owner on brink of administration

Debenhams’ parent company has reportedly appointed advisers to prepare its own administration.

According to reports in The Telegraph and The Times, Celine Group Holdings hired Philip Watkins and Philip Armstrong from FRP Advisory as advisers.

The move means the firm does not have to pay overdue interest payments on £200 million of bonds. It had reportedly been due July 15.

It comes after Debenhams itself entered administration in April for the second time within a year – albeit a “light touch” one, meaning directors are still running the retailer rather than handing it over to the administrators.

Sources speaking to The Telegraph said Celine going into administration would not have any impact Debenhams’ sales, staff, customers or suppliers.

Debenhams has already permanently shut down 20 stores and slashed an estimated 6500 jobs since the pandemic gripped the UK in March – 2500 of which was confirmed earlier this month.

Separately, in late July Debenhams drafted in advisers from Lazard to work on a sale of the business that could see a change of hands for the department store chain.

Last week, reports emerged that restructuring firm Hilco Capital had been drafted in to work on “contingency plans” for Debenhams, should a sale or rescue be unsuccessful and it falls into liquidation.

Before lockdown, the 242-year-old retailer had around 140 stores and was in the midst of a CVA restructure, which had seen it undergo several store closures after the peak Christmas trading season.

The current “light-touch” administration has seen it dwindle its store estate to 124 sites, but the retailer has since insisted that they are trading strongly.

Debenhams was delisted from the London Stock Exchange after its first administration in 2019, when a consortium of lenders led by US firm Silverpoint Capital took control of the retailer and rejected a few headline-grabbing takeover attempts from Frasers Group owner Mike Ashley.

This consortium became known as Celine Group Holdings.

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