JJB taps up shareholders for another £65m
JJB Sports has confirmed that it is in talks with with key stakeholders about another capital-raising exercise which would see a further £65m being pumped in to keep the business afloat.
The Wigan-based sports retailer issued a statement this morning following a number of press reports that it will tap up shareholders for more cash by saying that it was “in constructive discussions with its major shareholders in relation to their continued support”.
“As announced on 11 March 2011, the company currently expects to provide further details of its revised business plan, anticipated funding requirements and proposed financing arrangements on or around 15 March 2011,” the company said.
The company has only just completed an earlier £31.5m fundraising via a share placing which saw its five key investors – activist fund Crystal Amber, Harris Associates, the Bill & Melinda Gates Foundation, Invesco Perpetual and Golden Peaks Capital – increase their combined shareholding in the struggling retail chain to more than 71%.
JJB is also currently awaiting approval for its second Company Voluntary Arrangement (CVA) in as many years. This would lead to the firm closing 43 stores within the next 12 months, and up to 46 more within the next two years. It is currently seeking the support of its landlords for the deal, and needs to get it approved by 75% of creditors by value.
On Friday, Bury-based competitor JD Sports Fashion announced that it was abandoning its interest in a potential merger with JJB, with JD Sports Fashion’s executive chairman Peter Cowgill stating that JJB’s “silence has been deafening” in response to its indicative proposal.
“I am sure that we would have achieved a better solution than this,” Cowgill told TheBusinessDesk.com.
JJB Sports’ chairman Mike McTighe welcomed JD Sports Fashion’s withdrawal, describing its indicative proposal as was “highly conditional and lacking sufficient certainty to be deliverable”.
