The department store group has given the Sports Direct tycoon just over a week to put his money where his mouth is by either making a firm takeover offer or providing an alternative funding package.
Today, Debenhams confirmed it has put in place a £200 million refinancing plan, of which £101m will be drawn down immediately.
The retailer said this would allow it to begin a restructuring process involving store closures and rent reductions.
The other £99m will only be made available if Sports Direct – or any other shareholder with a stake of more than 25 per cent – fulfils one of two conditions by 8 April.
Under one option, Ashley can make a takeover offer which includes arrangements to refinance the group’s debt.
Alternatively, he can call off the emergency meeting he has requested to install himself on the retailer’s board and commit to either providing funding for the business or underwriting the issue of new shares.
If neither course of action is taken by the deadline, the company will go into a pre-pack administration, handing control to its lenders and wiping out shareholders, including Ashley’s stake of nearly 30 per cent.
This would then allow for the transfer of the £99m to the company under its new ownership.
Debenhams added that it will be contacting Ashley to gauge his interest.
The department store chain’s chairman Terry Duddy said: “We will now move to the next phase of the restructuring of the business, which includes reducing rents and reshaping our store portfolio, as we have referenced in previous announcements.
“These actions are necessary to ensure the strongest possible platform to support the business going forward.”
Earlier today, Ashley lashed out at advisers to Debenhams after his takeover approach was snubbed.
The billionaire Sports Direct owner released a statement saying: “Now the results of the vote are known and we have also been subsequently advised that the supportive HSBC are no longer part of Debenhams’ revolving credit facility, I think that, if there were any justice in the world, the majority of the advisers would be put in prison.”
FTI Consulting has been working with lenders to Debenhams, while Lazard and KPMG have been advising the retailer itself.
Only on Wednesday, Ashley, through Sports Direct, said he was considering tabling an offer for Debenhams that would value it at £61.4m.
But Debenhams has consistently resisted overtures from the tycoon.
Sports Direct said later today that it is giving “further consideration” to Debenhams’ announcement and weighing up its next move.