JJB Sports has confirmed that it is considering a £50m rights issue to raise capital for the sports retailer’s turnaround as its chairman Sir David Jones has become embroiled in a loan scandal.
In a statement, JJB said it was “reviewing a range of possible options to provide additional capital for the group.” These, it said, could include equity capital raising “by way of placing and open offer” and could include the disposal of further non-core assets.
It also said that the disposal of its fitness clubs to Dave Whelan was due to be completed ahead of plan and that it would repay its Barclays term loan ahead of its deadline of August 31.
Separately, The Sunday Times reported that Sir David Jones borrowed £1.5m in a personal loan from Sports Direct founder and rival Mike Ashley.
The paper alleges that Jones tried to distort facts about the loan to avoid embarrassment and because it could be seen as a conflict of interests.
The allegations were made in an email sent by Sports Direct finance director Bob Mellors to chief executive Dave Forsey and Sport’s Direct’s lawyers. In it Mellors said that Jones had told him he would “have to resign over the matter”.
A JJB spokesman said: “Sir David emphatically denies he asked Mike Ashley or any of his associates to lie. Sir David has no intention of leaving JJB until its turnaround is complete and the damage done by the previous management is set right.”
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