Debenhams secures £40m cash injection.
01/03/2019.
Debenhams has secured a cash injection with a £40m overdraft extension from lenders, as the department store faces long-term financial restructuring to stay solvent. Company leaders have welcomed the bridging loan facility as a way to stay afloat whilst directors determine a “broader refinancing and recapitalisation [plan]”, with chief executive Sergio Bucher terming the loan “a key part” of the company’s “turnaround plan”. News of the loan caused shares in the department store to rise by 40%, with the UK retailer set to pay Libor interest rates plus 5% on the loans — or more if no long-term financial restructuring plan is achieved.
Suppliers agree new deal with chain
In addition to securing a new loan facility, Debenhams announced this month that it had reached a deal with major suppler Li & Fung — which produces the chain’s own label clothing — to improve product quality and bolster profit margins with a more efficient supply process. The company, which has issued several profit warnings since last year, recently ruled out the sale of its Magasin du Nord Danish department store chain as an avenue for bolstering its balance sheet, due to the challenging climate currently faced by the retail market.
Speaking on the new £40m loan extension, a spokesperson for the company called securing the facility the “first step” in Debenhams’ “refinancing process,” adding: “The support of our lenders for our turnround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders, and deliver a sustainable and profitable future.”
Retailers face poor market conditions
Like many other British retailers, Debenhams has been plagued with financial pressures in recent months as wider challenges for the UK high street intensify. Amid low consumer confidence and weak Christmas trading, costs from employee wages and leases have become increasingly untenable for retailers, with many stores pursuing company voluntary arrangement insolvency schemes to manage debt. Major high street chains including Marks & Spencer, House of Fraser, New Look and Mothercare all entered into CVAs last year.
In order to survive cost pressures and the growing disruption from e-commerce, retail companies are advised to shore up their balance sheets by being diligent in watching their expenditures and pursuing invoices. Strong credit management systems are essential to surviving both the direct and indirect impact of financial strain on the high street – with the fall of large brands leading to potential setbacks for suppliers and smaller businesses.
Do you need a cash injection?
Your business might need a cash injection like Debenhams but are you finding it hard to secure that funding?
Rather than have to deal with difficult bankers, do you realise there may be a hidden source of capital within your business waiting to be activated.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
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CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hardwork. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
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The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
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We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cashflow.
Don’t et your bankers control you, contact CPA today.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply to restaurants, help us help you identify the risks.
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
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The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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