Debenhams Plc Announces Consent Solicitation

March 22, 2019

DEBENHAMS PLC
ANNOUNCES CONSENT SOLICITATION

Debenhams plc (the "Company") hereby announces an invitation to holders of its outstanding £225,000,000 5.25% Senior Notes due 2021, of which £200,000,000 remains outstanding (ISIN: XS1081972850; Common Code: 108197285) (the "Notes") to consider and, if thought fit, approve the Proposed Amendments as further described in a consent solicitation statement dated March 22, 2019 (the "Consent Solicitation Statement", and the invitation to holders of Notes set out therein, the "Consent Solicitation"). 

Capitalized terms used in this notice and not otherwise defined shall have the meanings given to them in the Consent Solicitation Statement.

Background to the Consent Solicitation

Further to the Company's announcement on March 11, 2019, certain members of the Company and its subsidiaries (the "Group") intend to enter into term loan facilities of up to £200,000,000 (the "New Money Facility"). It is intended that the New Money Facility will be provided by lenders of the Company's existing revolving credit facility (the "Existing Facilities Agreement"). The Company understands it is expected that all Holders will be invited to participate in the New Money Facility on a no more than pro rata basis. In connection with the entering into of the New Money Facility, certain covenants in the trust deed dated July 2, 2014 between the Company, the Subsidiary Guarantors named therein and Citicorp Trustee Company Limited (the "Original Trustee"), as amended, supplemented, waived or otherwise modified from time to time prior to this Consent Solicitation (the "Trust Deed") will be amended to align with certain negative covenants in the New Money Facility.

It is contemplated that, on or prior to the date on which the New Money Facility will be drawn, the Notes and the facilities provided in connection with the Existing Facilities Agreement (the "Existing Facilities") will be secured by the collateral securing the New Money Facility and thus, it is proposed that an intercreditor agreement (the "Intercreditor Agreement") will be entered into by, among others, the Company, the Subsidiary Guarantors, GLAS Trust Corporation Limited as security agent (the "Security Agent") and Lucid Trustee Services Limited as successor trustee (the "Successor Trustee") to govern the relationships and relative priorities among the Successor Trustee on behalf of itself and the holders of the Notes, lenders under the Existing Facilities, lenders under the New Money Facility and certain other creditors of the Company. Advance of the loans under the New Money Facility will be conditional on the execution of the Intercreditor Agreement by the relevant parties.

As a condition to funding the New Money Facility, additional protections are required entailing amendments to the Trust Deed. Such protections would enable lenders under the New Money Facility to direct and/or participate in a sale of any and up to all of the assets of the Group in distressed circumstances. Additional amendments to the Trust Deed will be made to facilitate possible future restructuring options.

A full background to the Consent Solicitation is set out in the Consent Solicitation Statement under the heading "Background and purposes of the Consent Solicitation".

Key Terms and Conditions of the Consent Solicitation

Proposed Amendments

The Proposed Amendments

The Company is soliciting Consents to the following amendments to the Trust Deed:

                first,

(a)   the removal of Citicorp Trustee Company Limited, as Original Trustee, and appointment of Lucid Trustee Services Limited (the "Successor Trustee") in accordance with Clauses 18.1 and 18.2 of the Trust Deed (the "Trustee Replacement Amendment");

followed by,

(b)   amendments to (i) allow certain members of the Group to incur additional secured indebtedness in an amount of up to £200,000,000 pursuant to the New Money Facility and (ii) otherwise replace the existing negative covenants with the negative covenants and definitions set forth in the Consent Solicitation Statement which will be substantially similar to certain negative covenants in the New Money Facility (the "Covenant Amendments");

(c)   amendments required to (i) grant security over certain assets and properties of the Group to secure the Company's and the Subsidiary Guarantors' obligations under the Notes, the subsidiary guarantees and the Trust Deed on a junior basis to the Company's and the Subsidiary Guarantors' obligations under the New Money Facility, (ii) make conforming changes to the Trust Deed to reflect that the Notes will be secured obligations, including the appointment of GLAS Trust Corporation Limited as security agent (the "Security Agent"), and (iii) authorize, instruct and direct the Successor Trustee, the Security Agent, the Company and the Subsidiary Guarantors to enter into the Intercreditor Agreement (the "Secured Obligations Amendment");

(d)  to amend the covenant contained in Condition 4.7 (Payments for Consent) in the Trust Deed to make it clear that, for the avoidance of doubt, such covenant shall not apply to the participation by certain Holders in the New Money Facility (the "Consent Payment Amendment");

(e)   amendments to the definition of Change of Control, insertion of an issuer substitution provisions and exclusion of certain events from the definition of an Event of Default, in each case to facilitate certain potential restructuring options of the Company (the "Reorganization Amendments"); and

(f)   to make the necessary amendments to allow for the accession of Aktieselskabet Th. Wessel & Vett, Magasin du Nord and the Company (the "Additional Subsidiary Guarantors") as Subsidiary Guarantors (the "Guarantor Accession"),

(the Trustee Replacement Amendment, the Covenant Amendments, the Secured Obligations Amendments, the Consent Payment Amendment, the Reorganization Amendments and the Guarantor Accession, together the "Proposed Amendments").

Further detail around the Proposed Amendments is contained in the Consent Solicitation Statement under the heading "Background and purpose of the Consent Solicitation".

Consent Fee

A Consent Fee of 0.75 per cent. of the outstanding principal amount of the Notes which are the subject of an Electronic Consent Instruction voting in favor of the Proposed Amendments is being offered to Holders who vote before the Expiration Time. Payment of the Consent Fee is conditional on the implementation of the Proposed Amendments by the execution of the Amendment Documents by the Company, the Original Trustee and the Successor Trustee, among others. Subject to the implementation of the Proposed Amendments, the Company expects to pay or procure the payment of the Consent Fee to eligible Holders no later than 5 Business Days following the date of the Expiration Time (the "Payment Date").

General

In order to formulate the Proposed Amendments, the Company has engaged in constructive discussions with approximately 30 per cent. in aggregate principal amount of the Notes outstanding (the "Supporting Holders"). The Supporting Holders have agreed to vote in favor of the Proposed Amendments prior to the Expiration Time, and as at the date hereof, are expecting to continue to provide support as the Company continues to pursue options to restructure its balance sheet.

The Company expressly reserves the right, in its sole and absolute discretion, at any time to (i) terminate the Consent Solicitation, (ii) waive any of the conditions to the Consent Solicitation, other than the conditions with respect to receipt of the Requisite Consents, (iii) amend or extend the Expiration Time or (iv) amend the terms of the Consent Solicitation in any manner. Details of any such waiver, amendment or termination will be announced as provided in the Consent Solicitation Statement as promptly as practicable after the relevant decision is made.

Set out below is an indicative timetable showing one possible outcome for the timing of the Consent Solicitation, which will depend, among other things, on timely receipt (and non-revocation) of instructions from the Holders, the rights of the Company (where applicable) to amend and/or terminate the Consent Solicitation as described in the Consent Solicitation Statement. Accordingly, the actual timetable may differ significantly from the timetable below.

Holders are advised to check with any bank, securities broker or other intermediary through which they hold their Notes when such intermediary would need to receive instructions from a Holder in order for such Holder to participate in, or to validly revoke their instruction to participate in, the Consent Solicitation by the deadlines specified above. The deadlines set by any such intermediary and each Clearing System for the submission and (where permitted) revocation of Electronic Consent Instructions will be earlier than the relevant deadlines above.

Further Information

A complete description of the terms and conditions of the Consent Solicitation is set out in the Consent Solicitation Statement. A copy of the Consent Solicitation Statement is available to Holders upon request from the Information and Tabulation Agent.

Before making a decision with respect to the Consent Solicitation, Holders should carefully consider all of the information in the Consent Solicitation Statement.

Further details about the transaction can be obtained from:

The Information and Tabulation Agent

Lucid Issuer Services Limited

Tankerton Works,

12 Argyle Walk,

London WC1H 8HA

Telephone: +44 20 7704 0880
Attention: Paul Kamminga / Sunjeeve Patel

Email: debenhams@lucid-is.com

Website: www.lucid-is.com/debenhams

The Information and Tabulation Agent does not take responsibility for the contents of this announcement and none of the Company, the Guarantors, the Information and Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This announcement must be read in conjunction with the Consent Solicitation Statement. No offer to acquire any Notes is being made pursuant to this notice. This announcement and the Consent Solicitation Statement contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Forward-Looking Statements

The Company cautions you that statements included in this announcement that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause results to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that the transactions contemplated in this announcement will be completed. The Company assumes no obligation to update any forward-looking statement included in this announcement to reflect events or circumstances arising after the date on which it was made.

Distribution Restrictions

This announcement does not constitute or contemplate an invitation to participate in the Consent Solicitation in any jurisdiction in which, or to any person to whom, it is unlawful to make such invitation or for there to be such participation under applicable securities laws.
 

The distribution of this announcement in certain jurisdictions may be restricted by law. Persons into whose possession this announcement comes are required by each of the Company, the Subsidiary Guarantors, the Original Trustee, the Successor Trustee, the Security Agent and the Information and Tabulation Agent to inform themselves about, and to observe, any such restrictions.

Nothing in this announcement constitutes or contemplates an invitation to participate in the Consent Solicitation by a Holder in any circumstances in which such participation is unlawful.

This announcement has been issued through the Companies Announcement Service of Euronext Dublin.