Debenhams Plans £300 Million Offering

LONDON, June 3 (Reuters) – British department stores group Debenhams (DEB.L) plans to raise over 300 million pounds ($499 million) on Thursday in a placing and open offer of new shares, two sources familiar with the matter told Reuters on Wednesday.

One source said the fundraising was likely to be priced above 75 pence a share, but below Wednesday’s closing price of 92.25 pence.

A spokesman for Debenhams declined to comment.

Debenhams, Britain’s second-biggest department stores chain, has long been tipped to launch an equity fundraising in order to reduce its 900-million-pound plus debt pile.

The firm reiterated in April that “it is important that leverage is taken off the agenda.”

One source said private-equity groups TPG and CVC — which together own almost 22 percent of Debenhams’ equity according to Reuters data — might sell down their stakes following the announcement of the fundraising.

TPG and CVC declined to comment.

Debenhams, which runs over 150 shops across the UK and Ireland, returned to the stock market in 2006 after 2-1/2 lucrative years in private equity hands.

The stock was refloated at 195 pence, but plunged to as low as 20-1/2 pence last November on fears a steep consumer downturn would lead it to breach its debt agreements.

Debenhams has always said it would meet its debt obligations and stronger-than-expected first-half results calmed investors’ nerves and led to a strong share price recovery.

The stock closed down 1.3 percent at 92.25 pence on Wednesday, valuing the business at about 798 million pounds. (Reporting by Mark Potter and Simon Meads, Editing by Sitaraman Shankar and Elaine Hardcastle)