Debenhams confirms £35m equity fundraise to support turnaround plan

The radical said its committee believes the planned fundraise volition supply "additional liquidity" and effect successful the "optimal superior structure".

Debenhams expects the fundraise to trim its nett indebtedness to adjusted net earlier interest, taxes, depreciation, and amortisation (EBITDA) ratio to little than 2x wrong FY27.

Currently, its committee is engaged successful “advanced discussions” with the group’s lending syndicate, aimed astatine improving covenant presumption and expanding fiscal flexibility for the ongoing turnaround and maturation initiatives. These revised indebtedness presumption are contingent connected the palmy completion of the planned fundraise.

Directors Dan Finley, Mahmud Kamani, and Iain McDonald person each signalled their volition to instrumentality portion successful the projected fundraising, subscribing astatine an contented terms of 20 pence per mean share.

The institution intends to consult with organization shareholders successful the coming days earlier formally launching the fundraising process.

Debenhams’ committee maintains its assurance successful delivering £50m successful adjusted EBITDA successful the fiscal twelvemonth ending February 2026, successful enactment with erstwhile guidance from the company’s trading update released connected 28 January 2026.

Expectations besides stay for double-digit adjusted EBITDA maturation during the pursuing fiscal year.

The radical reports ongoing improvements successful gross merchandise worth trends during the 4th fourth and continued advancement successful reducing operational costs.

Cost simplification measures person resulted successful a fixed outgo exit complaint of £130m for FY26, down from £175m.

The committee reports that each brands nether the radical are trading profitably connected an adjusted EBITDA basis.

Following a turnaround astatine PLT, which is nary longer classified arsenic an plus held for sale, Debenhams continues to research avenues for deleveraging and moving superior management. These see strategical IP licensing, proviso concatenation partnerships, alternate superior financing options, and disposal of non-core assets.

Furthermore, the committee believes that implementing the planned fundraise volition pb to what it describes arsenic an “optimal superior structure” and “the astir economical financing.”

Additional liquidity from some the fundraising and amended indebtedness presumption volition enactment continued advancement towards transitioning to a much asset-light concern model.

Cash lease costs are projected to diminution from £17m successful FY26 to astir £13m successful FY27, with further reductions expected aft exiting a vacant US spot lease.

The institution besides forecasted superior expenditure to alteration from astir £16m this twelvemonth to £8m adjacent year.