Sports retailer JJB Sports has said its intended £65m fundraising will help provide management with greater operational flexibility and the money to fund to its turnaround plan.
In a statement to the Stock Exchange it said the new funding – which will amount to a net £60m – will “in particular allow the company to reduce its reliance on the availability of supplier credit and provide the necessary funds for the implementation of the group’s revised business”.
JJB said it would invest the funds in “retail basics”, including remodelling stores and “general capital programmes”, including maintenance and IT.
JJB said the capital raising will be by way of a firm placing and placing an open offer supported by shareholders Harris Associates, Crystal Amber, Invesco Asset Management and Bill & Melinda Gates Foundation Trust. It will be fully underwritten by Numis.
However the capital raising is conditional on, among other things, the approval of shareholders at a General Meeting to be held on April 26.
JJB secured a life saving company voluntary arrangement last month, as creditors passed a plan to shed stores in order for the retailer to stave off administration.
Today (Wednesday) JJB restated it will delist from the London Stock Exchange and begin trading on AIM on April 28, on completion of the restructuring and refinancing.
The retailer also said that Richard Manning, legal and operations director and company secretary, will leave the board at the Company’s AGM in July.
JJB chairman Mike McTighe said: “After the approval of our CVA proposals by creditors and shareholders in March, I am delighted that we are today confirming the details of this capital raising with the support of our four largest shareholders.
“Together with the implementation of the CVA and continued availability of our banking facilities with BoS, this fundraising will mark the end of our financial restructuring process.
Once complete, it will allow the company to press on with the next stage of implementing its revised business plan and allow management to focus solely on the turnaround of the group’s retail business.”