The move is expected to trigger store closures and job losses as part of a shake-up that will see around 50 outlets axed via a Company Voluntary Arrangement.

And it is bad news for shareholders who will see their investments wiped out – including Mike Ashley’s Sports Direct, who holds a 30% stake. 

Debenhams had this morning rejected a separate rescue bid tabled by the billionaire tycoon.

The company announced it was suspending shares – as Mr Ashley made a revised last-ditch £200million rescue bid, upping the ante on an earlier £150million offer for the struggling clothing chain, which was rejected yesterday. 

“We remain focused on protecting as many stores and jobs as possible”

Debenhams chairman Terry Duddy

Under the newer proposal, Debenhams’ lenders would have had to agree to write off £82million of its £720millon debt mountain. 

The company would also have had to install Mr Ashley as chief executive. 

But lenders dismissed the offer as “not sufficient”. 

Debenhams later requested its shares be suspended with immediate effect pending a further update. 

Administrators at FTI Consulting were appointed to the retailer at just before 10am today and immediately sold the group’s operating companies to a new entity owned by its lenders.

Debenhams chairman Terry Duddy said: “It is disappointing to reach a conclusion that will result in no value for our equity holders.

“However, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans, whilst deleveraging the group’s balance sheet.

“We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance.”

The company said in an earlier statement this morning:  “The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of 9 April, which indicated a willingness of Sports Direct to underwrite an equity issue of £200 million.

“The company’s lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the 8 April deadline.

“The company anticipates making a further announcement during the course of the day following further discussions with its lenders.”

Mr Ashley yesterday demanded the Debenhams board take a lie detector test after accusing them of “falsehoods and denials”.

Just weeks earlier Debenhams issued a profit warning alert as sales nosedived. 

Sports Direct said today that it is continuing to “actively evaluate” a conventional takeover, priced at 5p per share.

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