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Debenhams - enters administration

9 April 2019

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Administrators have been appointed to run Debenhams. Their first action was to sell the assets to a newly incorporated company controlled by the Group's secured lenders.

Those lenders will oversee a restructure and seek a buyer, but Debenhams says it doesn’t expect there will be anything for shareholders.

Shares have been suspended since 8am on 9 April and will be cancelled on 10 April.

All shops continue to trade as normal.

Our view

This announcement doesn’t come as a surprise. With trading in a downward spiral, and cumbersome rental agreements bogging Debenhams down, administration has been a potential outcome for some time.

After Debenhams rejected a final-hour offer from Sports Direct, the company is now in the hands of lenders. Hope of recovering any shareholder value has pretty much vanished.

That’s because, in order for shareholders to get anything back now, Sports Direct or any other buyer would have to agree to pay off all Debenhams’ debt. Given the group is struggling to make ends meet, that seems unlikely.

Read more of our latest share research here

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Investment notes
No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

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