JJB Sports set to raise extra funds
Struggling sportswear retailer JJB Sports has confirmed it is considering selling shares to raise extra funds.
The group, which has been undergoing a rescue turn-around led by retail veteran Sir David Jones, confirmed it was “reviewing a range of possible options to provide additional capital.”
It is understood that JJB Sports is looking to raise at least £50m in a placing and open offer of shares at 12p each – a 61 per cent discount to Friday’s closing price of 30.75p.
JJB Sports still urgently needs working capital to reinvigorate the firm which has tinkered on the brink of collapse.
The group was given a life-line in March from the sell-off of its fitness chains to group founder Sir Dave Whelan. Under the terms of the £83.4m gym chain deal, JJB Sports used the funds to secure a company voluntary agreement with landlords to not pay rent on 140 already closed stores. This then allowed the group to successfully complete its £50m refinancing and end its standstill agreement with Barclays and Lloyds Banking Group, marking the end chapter of the group’s recent struggles.
JJB yesterday said the lease assignment process in relation to the sale of its fitness clubs business to founder Dave Whelan was ahead of plan.
It added it also expects to repay a short-term £25m loan to Barclays ahead of its payment date of 31 August.
The company, which recently reported a pre-tax loss of £189.2m in the year to 25 January, warned investors to not expect a recovery in trading until the fourth quarter of this year.