Shareholders approve JJB fundraising
SHAREHOLDERS of embattled sportswear retailer JJB Sports have approved its plan to raise a further £33.5m fundraising via a share placing at a general meeting last Friday.
The retailer announced the plan to raise the money to reduce a £25m loan it owes to its bank, Bank of Scotland. The money was raised via a share placing and open offer which saw the firm offering 315m shares via a placing with existing investors and a further 315m by way of an open offer at a price of 5p per share.
Only around 3.7% of the open offer shares were taken by new investors, which means that the bulk of new shares issued went to its five key shareholders who had already announced their intention to support the deal – activist fund Crystal Amber, Harris Associates, Invesco Perpetual, The Bill & Melinda Gates Foundation and GoldenPeaks Capital. Between them, the five organisations now own a total of 71% of JJB’s shares,
However, the Wigan-based company, which has also held talks with JD Sports about a potential merger, still needs to gain approval from landlords for a proposed company voluntary arrangement (CVA), which would be its second in as many years.
This would allow it to to walk away from 45 more stores and potentially close 50 more within the next two years, leaving it with a core of just 150 stores.
The firm announced plans for the CVA on February 11. It said that if the deal were not approved, it faced the prospect of entering into administration, threatening 6,000 jobs.
JJB, which nearly went into administration two year ago, has already gone through one CVA, and there have been reports that retail landlords will take a tougher stance this time around.
