Debenhams poised to launch CVA this week

The besieged department store group, which was put into a pre-pack administration earlier this month after protracted wrangling around its restructuring and emergency funding, is now controlled by its lenders.

The consortium at the helm, understood to comprise banks such as Barclays and Bank of Ireland, as well as hedge funds Alcentra and Silver Point, is expected to unveil its proposed CVA in the coming days.

Details of the plan could even be revealed as early as tomorrow, though sources cautioned that the proposal was still being finalised.

The agreement would see around 50 stores close with the lending consortium expected to stick to the initial terms outlined by former management with no stores closed before Christmas. Debenhams will seek reduced rent periods from landlords of stores outside the 50 slated for closure but will not seek rates-only deals.

The lenders will be keen to appear decisive after seeing off the advances of Mike Ashley who, after ousting former chair Sir Ian Cheshire and former chief executive Sergio Bucher from the Debenhams board, was determined to seize control of the business.

Bucher stepped down from his position last week to “allow new leadership to carry through the restructuring and turnaround of the business”.

Chair Terry Duddy will assume a more hands-on role as interim executive chair. A search for Bucher’s long-term successor is underway.

His exit came a week after Debenhams’ new owners drafted in a chief restructuring officer, Alvarez & Marsal managing director Stefaan Vansteenkiste.

Since failing to take control of Debenhams, and consequently losing his stake in the business, Ashley has complained that the administrators of Debenhams are not conducting a “genuine” sale process and has called the administration a “national scandal”.