Sports retailer JJB Sports yesterday postponed a £100m rights issue after a City regulator intervened to delay the deal that was due to be announced yesterday morning.
The UK Listing Authority held up the cash call over a mystery accounting issue. The delay is the latest in a string of problems for JJB, which almost fell into administration in March after credit insurers refused to back the group’s suppliers.
Rather than disclosing details of the rights issue, JJB issued a holding statement to the stock exchange, indicating that the rights issue had been postponed.
JJB is now likely to announce the deal on Monday morning, when it will come under pressure to explain the reasons for the delay.
The new shares are set to be priced at 25p each, a deep discount to Thursday night’s closing price of 34.5p. The cash call is bigger than that reported early in the week when reports suggested that the capital raising would total £60m.
Despite its problems in the last 12 months, which includes sustained losses, the sportswear retailer 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.