Department store retailer Debenhams has said the time period for any appeal to be lodged against its CVA has now expired, allowing it to proceed with a debt-for-equity swap.
The insolvency process involved the closure of at least 22 of Debenhams’ 166 stores in January, and rent cuts on its remaining shops.
Debenhams won a challenge against its CVA in September last year, after Combined Property Control Group – the landlords of six Debenhams stores – took legal action, with backing from Mike Ashley’s Sports Direct.
Southampton Estates, one of the group’s six landlords, had last month secured permission to appeal on several grounds, including that the judge erred in law in holding that a landlord could be a “creditor” in respect of future rent and in holding that a CVA can permit a tenant to retain possession of the property at less than the contractual rent.
However, Debenhams has today confirmed that all relevant procedural matters at the CVA challenge hearing in February, and the entirety of the CVA challenge process, have concluded in its favour.
The retailer’s shareholders will now proceed with the final phase of its debt restructuring, which is expected to result in the conversion of at least £100m of debt to equity.
Stefaan Vansteenkiste, chief executive of Debenhams, said: “This is great news for Debenhams. We can put the distraction of this litigation behind us and proceed with our plans to turn the business around.
“With committed investors, a strengthened board and a restructured balance sheet we have the platform from which to rebuild a sustainable business.”
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