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The Times & The Sunday Times
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JJB Sports goes back to investors for more cash

Alex Spence
The Times
File photo dated 17/03/09 of a JJB Sports shop as the ailing retailer has offered landlords a pay-out of up to £7.5 million if they accept a deal that could see 89 stores close as it battles to stave off administration. PRESS ASSOCIATION Photo. Issue date: Thursday March 3, 2011. Wigan-based JJB wants to close 43 of its 246 stores on or before April 24 2012, while a further 46 stores could be closed by April 24 2013 if their performance does not improve. Under the terms of the deal, known as a company voluntary arrangement (CVA), the landlords of the 89 stores will also see their rent reduced by 45%. See PA story CITY JJB. Photo credit should read: Dave Thompson/PA Wire
File photo dated 17/03/09 of a JJB Sports shop as the ailing retailer has offered landlords a pay-out of up to £7.5 million if they accept a deal that could see 89 stores close as it battles to stave off administration. PRESS ASSOCIATION Photo. Issue date: Thursday March 3, 2011. Wigan-based JJB wants to close 43 of its 246 stores on or before April 24 2012, while a further 46 stores could be closed by April 24 2013 if their performance does not improve. Under the terms of the deal, known as a company voluntary arrangement (CVA), the landlords of the 89 stores will also see their rent reduced by 45%. See PA story CITY JJB. Photo credit should read: Dave Thompson/PA Wire
DAVE THOMPSON/PA
Alex Spence
The Times

JJB Sports said yesterday that it would ask shareholders for an additional £65 million in funding, days after the rival JD Sports Fashion abandoned takeover talks.

The ailing sportswear group said that it was in discussions with its big shareholders and that it would provide further details when it unveiled a new business plan tomorrow.

The rights issue would be JJB’s second this year and is a key part of the management’s attempts to revive the Wigan-based company, along with its attempt to secure a make-or-break deal with its landlords.

JJB said yesterday: “The company currently expects the quantum of the proposed equity capital raising to be around £65 million and is in constructive discussions with its major shareholders in relation to their continued support.”

JJB’s largest investors, including Harris Associates and Crystal Amber, are believed to be supportive of the fundraising. The latest round comes only a month after the company raised £31.5 million from its big investors.

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Mike McTighe, the turnaround specialist parachuted into JJB as chairman in December, is expected to set out the first part of a five-year recovery plan tomorrow. This month JJB announced details of its proposed company voluntary arrangement (CVA), under which it hopes to close 46 stores and halve its rents on a further 46 outlets before deciding whether to close them in two years.

It is the second time in two years that JJB has gone cap in hand to its landlords. The company needs the support of 75 per cent of its unsecured creditors and 50 per cent of its shareholders for the CVA to be passed, at a meeting on March 22.

Shares in JJB Sports fell by 10 per cent to 13½p on Friday after JD Sports Fashion walked away from a potential takeover, claiming that its rival had snubbed its request for information.