Ashley's share issue plan rejected by Debenhams
Debenhams has rejected Mike Ashley's latest offer to rescue the troubled retailer only hours after he disclosed it.
The billionaire's Sports Direct International said Debenhams turned down a proposal to issue £150m (€174m) in new shares, as a deadline for talks with creditors looms.
Mr Ashley said earlier he had offered to underwrite the shareholder rights issue in a move to prevent him from losing much of his equity investment in the retailer.
Even after Debenhams rejected the plan, Ashley said a cash offer valuing the store chain at £61m (€70m) remained an option.
He called on the company and its lenders to "actively engage in negotiations".
Mr Ashley is locked in a battle with Debenhams lenders, including banks and US hedge funds, as the company seeks to restructure about £720m (€834m) of debt.
The struggling UK retailer is preparing a so-called prepackaged administration under which shareholders -including Sports Direct with a roughly 30pc stake - would likely lose their investments.
Pre-pack administration is typically a court-based process which can allow creditors to take control in a pre-agreed plan while the company continues to operate as normal. It does not require shareholder approval.
Mr Ashley's latest offer came after Sports Direct accused Debenhams of "a sustained programme of falsehoods and denials". In a statement late on Sunday, it called for board members of the department store company to take lie-detector tests.
Mr Ashley, CEO of Sports Direct, said his support for the rights issue would have been conditional on him being named CEO of Debenhams, a request that was previously a sticking point in negotiations.
Debenhams shares, which have fallen more than 90pc over the past 12 months, were down 14pc on Monday afternoon after early gains.
The latest proposal from Mr Ashley would have been subject to Debenhams creditors agreeing to write off £148m (€171m) in debt.
It also included the lenders swapping another £122m (€141m) of debt for shares, according to a letter from Sports Direct to Debenhams.
The company has previously snubbed an offer from Mr Ashley for a £150m (€174m) interest-free loan, preferring a new financing package from creditors. Debenhams' lenders have also repeatedly rebuffed Mr Ashley's attempts to be named CEO.