Once Britain's biggest department store chain, Debenhams has been struggling with net debts of almost 300 million pounds and plans to close 50 underperforming stores, putting about 4,000 jobs at risk, after it failed to keep pace with consumers moving online and to cheaper outlets.
It said the new loan, agreed for a period of 12 months, would act as a bridge to "facilitate a broader refinancing and recapitalisation", adding it was still talking to its stakeholders and would conclude a "comprehensive refinancing".
The retailer, which is striving to avoid the fate of collapsed rivals BHS and House of Fraser, also said it had signed an agreement with Hong Kong-listed supply chain solutions firm Li & Fung to develop a strategic sourcing partnership.
Shares in Debenhams, which lost more than 85 percent of their value in 2018, were up 33.9 percent at 4.23 pence by 0820 GMT. That lifted the company's market value to 52 million pounds, although some analysts questioned whether the extra funding would be enough or whether Debenhams might yet take up an offer of financing help from Mike Ashley's Sports Direct, its biggest shareholder.
(GRAPHIC: Debenhams fights for survival -
"This interim solution ... shows the ongoing discussions with their lenders are constructive and ensures Debenhams can get through its working capital peak in April," analysts at brokerage Investec said in a note.
"The strategic announcement with Li & Fung also enables them to consolidate its supplier base more quickly and helps those suppliers which have a credit insurance issue."
UK media have reported previously that Debenhams had turned down an offer of a similar cash injection from Ashley's Sports Direct, which already holds almost 30 percent of the company and has snapped up businesses after a number of UK high street collapses.
Other London-based analysts remained downbeat about Debenhams' prospects.
"While this (refinancing) takes away the immediate pressure and provides a short respite, we believe Debenhams is likely to move forward with a CVA in order to reduce its lease commitments and store numbers, with longer-term financing also likely to be contingent on some form of equity raise," John Stevenson, retail analyst at Peel Hunt, said in an email.
"The prospect of a CVA and equity raise may well secure the future of Debenhams, but also leaves little equity value for existing shareholders and we reiterate our Sell stance."
Before Tuesday's plan was announced, Debenham's combined credit score - which measures how likely a company is to default in the next year on a scale of 100 (very unlikely) to 1 (highly likely) - was "1", Refinitiv Eikon data showed.
(Reporting by Noor Zainab Hussain in Bengaluru; editing by Patrick Graham and Susan Fenton)
By Noor Zainab Hussain