Department store chain Debenhams is carrying a massive debt load, but still the chain has rejected Mike Ashley's ultimate plan to save it. That means the company is now under the control of the creditors.
Mike Ashley was willing to inject 200 million pounds into the company. In exchange, the current management would have to quit and he was to become the CEO. The Sports Direct owner is in possession of almost a third of Debenhams' stock.
His ultimate rescue plan was rejected and as a result the chain is now in the hands of its creditors, mostly high street banks and American hedge funds. Those will most likely try to sell the company as quickly as possible. In addition, Debenhams stock will become worthless.
Debenhams currently has 166 outlets but there are plans to close about fifty, which would entail cutting 4,000 jobs. The department chain store was forced to issue various profit warnings last year and made a record loss of 491.5 million pounds (569 million euros). The company's total debt load comes down to 622 million pounds (720 million euros). The downfall of Debenhams is said to be due to fierce online competition and heavy expenses.