JJB sports in 65m fundraiser

Ailing retailer JJB Sports has launched a new £65m fundraising drive in a move that it hopes will draw a line underneath its recent financial turmoil and help the company to move forward with its new restructuring plan. The proposed issue of 162.5m new

shares has secured the support of four of its biggest stakeholders – Harris Associates, Crystal Amber, Invesco Asset Management, and Bill & Melinda Gates Foundation Trust – and will be voted on by shareholders by 26 April.

The proposed share placing comes a fortnight after the company agreed a CVA with landlords, and other creditors backed an emergency rescue plan that will see JJB close 43 unprofitable stores, put another 46 under review and move to monthly rental payments.

More than 75% of JJB’s creditors – the majority of which are landlords – and over 50% of shareholders approved the controversial company voluntary arrangement (CVA), which is alternative to administration.

JJB has currently been boosted by a new £25m working capital facility with Bank of Scotland.

Chairman of JJB, Mike McTighe, said ‘together with implementation of the CVA and continued availability of our banking facilities with BOS, this fundraising will mark the end of our financial restructuring process.’

He continues, ‘Once complete, it will allow the company to press on with the next stage of implementing its revised business plan and allow management to focus solely on the turnaround of the group’s retail business.’

The 65million cash call could only be put into place if the CVA was approved.

JJB seem to have good fundraising policies – it comes only 2 months after JJB raised £31.5m in a similar share placing.