JJB’s £50m refinancing "milestone"
RETAILER JJB Sports has achieved a “milestone” in its long term future by finalising a new finance package.
The business has spent the year grappling with losses and huge debts, but it has now reached an agreement with its bankers, the Bank of Scotland and Barclays, to secure a facility worth £50m.
The cash will allow the group refinance debts worth around £65m with the two banks and settle its £16m debt with Kaupthing Singer & Friedlander, ending standstill agreements that have been in place since December.
The new deal follows the use of a company voluntary arrangement which has allowed the group to reach an agreement with many of its creditors. The two banks would only agree to back JJB if this plan was accepted by both shareholders and creditors.
Under the new agreement the Bank of Scotland will provide a £25m revolving working capital facility which terminates on September 30, 2010. Barclays has also provided £25m but this must be repaid in three months.
The business said today that it planned to repay the bank with cash from the £83m sale of its Fitness Clubs business to former JJB chairman David Whelan.
Executive chairman Sir David Jones said: “We are extremely pleased to have moved to the new financing arrangements with our lenders today, and to have terminated the standstill arrangements, under which we have been operating since December 2008.
“The successful implementation of our CVA last week and the move to our new financing arrangements today are major milestones in securing JJB’s longer term future”.
