JJB Sports to deliver £100m fund raising
Friday 09 October 2009
JJB Sports will today unveil a £100m cash call aimed at securing the ailing sportswear retailer's future.
The share placing – to raise more than the group's £86.5m market capitalisation – will primarily be used by JJB for working capital to address the dire lack of product in its stores, which is crippling the company's recovery prospects.
JJB, which came close to collapsing into administration in March, has suffered from credit insurers withdrawing cover for its suppliers and its future has been uncertain for sometime.
The sportswear retailer, however, now believes it has identified a gap in the market for a company focused largely on selling sports equipment, moving away from the fashion focus of its former chief executive Chris Ronnie.
Speculation about a fund raising surfaced over the summer, but it was thought that JJB was only looking to raise about £50m. It is understood that demand for the fund raising has been high. The two major investors, Harris Associates and Crystal Amber, are supportive and several new institutions are set to come in. JJB has endured a turbulent year. In April it agreed a company voluntary arrangement – an insolvency procedure – with landlords and exited 140 unprofitable stores.
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