Debenhams secures £200m of new funds in two facilities from its existing lenders. Credit: Momentum.

UK department store chain Debenhams has secured £200m ($261m) in funds from its existing lenders.

This comes following £40m of financing from existing lenders in February.

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Of the total funds, the company has received the first facility of £101m and will receive the remaining £99m in after reaching certain required milestones by 8 April.

The milestones include sportswear retailer Sports Direct making an offer to buy the department store chain, covering a refinancing of its debt and sufficient working capital.

Sports Direct currently owns an approximately 30% stake in Debenhams.

"We will now move to the next phase of the restructuring of the business, which includes reducing rents and reshaping our store portfolio."

Debenhams chairman Terry Duddy said: “We are pleased to have agreed this comprehensive funding package, which secures the future of the Debenhams business and provides reassurance for Debenhams’ employees, pension holders, suppliers, lenders and other stakeholders.

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“We have also preserved a route for our shareholders to participate in the future of the business, but this requires the support of our major shareholder.

“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.”

Debenhams has requested that Sports Direct either makes a firm offer for the group, underwrites a rights issue, or provides debt funding in order to prevent its ownership falling into the hands of lenders.

Last month, Sports Direct CEO Mike Ashley served a notice to Debenhams for the removal of all its current board members.

It also offered the department store chain a £150m unsecured term loan to take control of an additional 5% share and appoint Ashley as the chain’s CEO.