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Debenhams, the troubled group of department stores, said it had agreed to an extension of its credit facilities and a supply partnership with Li & Fung, the trading company listed in Hong Kong.
He said he obtained an additional £ 40 million facility for one year from some of his unsecured lenders and bondholders. The amount corresponds to the loan offered last year by the 30% shareholder of Sports Direct.
The agreed facility "will serve as a bridge to facilitate broader refinancing and recapitalization," the group said in a statement.
She also said that she had reached an agreement with Li & Fung to develop a strategic sourcing partnership. Debenhams is expected to cover a significant portion of the Company's own brand supply, which would result in improved quality and production lead times, higher realized margins and improved working capital efficiency.
"Today's announcement represents the first step in our refinancing process. The support of our lenders to our recovery plan is important to found a comprehensive solution that will consider the interests of all stakeholders and provide a sustainable and profitable future for Debenhams. "
Sergio Bucher, the managing director of Debenhams, who was dismissed from the board of directors by Sports Direct and another shareholder in January, but who continues to run the company, said that these steps were "a key element of our recovery plan".
As trading deepened within the company last year, Debenhams began laying the groundwork for refinancing. Matt Smith, his former chief financial officer, renegotiated the terms of his £ 320 million revolving credit facility to prevent a technical breach of his fixed guarantee commitment, which measures profit against rent and interest obligations .
His successor, Rachel Osborne, said after Christmas that the company would give priority to renegotiating its banking facilities. In addition to its bank debt, the company has £ 200 million of senior unsecured bonds outstanding which are to be repaid in 2021. A half-yearly coupon of £ 5.25 million was paid in January, the next payment being due in July.
At the same time, the group abandoned plans to sell Magasin du Nord, a chain of seven department stores in Denmark that badysts say could be as high as £ 200m, saying it was unlikely the price of Store reflects its price. The international division, of which Magasin is a part, realized a profit before interest, taxes, depreciation and amortization of £ 45.3 million last year.
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