George Salmon, Equity Analyst 9 April 2019
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.
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.