Department store chain Debenhams has been placed into administration and the retailer's lenders have seized control of the company.

The company, which has outlets in Bullring and The Fort in Birmingham , Merry Hill in Dudley and Walsall,  has appointed FTI Consulting to carry out the process but the retailer insisted stores would continue to trade as normal.

Administrators have sold the group to a newly-incorporated company controlled by Debenhams' lenders, including hedge funds thought to include Alcentra, Angelo Gordon and Silver Point Capital.

Under new ownership, Debenhams will have access to £200 million in emergency funding.

Shoppers at Debenhams in the Bullring
Shoppers at Debenhams in the Bullring

Sports Direct's owner Mike Ashley had been trying to buy the company but had not managed to secure a deal and trading in Debenhams' share was suspending on Tuesday morning, April 9.

The chain rejected a £150 million offer from Mr Ashley's company because he wanted to become chief executive.

It would have seen Sports Direct underwrite the raising of £200million by issuing new shares, higher than its previous proposal.

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Debenhams has proposed closing about 50 branches from next year and renegotiating rents with landlords to tackle its funding problems after issuing three profit warnings last year.

An update to the stock exchange by Debenhams said its commercial relationships with suppliers, employees, pension holders and customers would not be adversely impacted by the administration.

The statement added: "The group has undertaken a thorough review of its store estate in the context of the current and future retail environment and plans to proceed with a restructuring of the estate that, if approved, will result in a significant overall reduction in the group's rent burden and underpin a sustainable future."

Chairman Terry Duddy added: "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 while 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."