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Indebted Debenhams to raise up to 400m in rights issue

BRITAIN&rsquo;S second biggest high street retailer Debenhams is expected to announce today that it is raising up to &pound;400m through a placing and open offer.<br /><br />The high street bellwether is hoping to raise between &pound;300m and &pound;400m to cut its &pound;1bn debt pile. Debenhams was controversially floated in 2006 by private equity firms IPG and CVC Capital Partners, which own 12.8 per cent and 8.4 per cent of the retailer respectively. It is now understood that they are selling down their stakes, which were last night worth &pound;104.4m and &pound;73.4m respectively, after Debenhams closed down 1.34 per cent at 92.2p.<br /><br />Chief executive Rob Templeman last month reiterated his desire to take the company&rsquo;s debt pile &ldquo;off the agenda.&rdquo; It hired restructuring specialist Lazards in January to examine the renegotiation of its &pound;900m debt pile beyond its repayment deadline of 2011.<br /><br />No further payments are due until next May, but it is thought that Debenhams is keen to act now after its shares recovered last month on the back of better-than-expected results at its interims. Debenhams is also being advised by Merrill Lynch and Citigroup, the two banks which led its IPO.<br /><br />It declined to comment last night.