Under pressure sports retailer JJB Sports has today announced that it has agreed in principle to raise £31.5 million in capital with its largest shareholders, after major changes to its board.
John Clare, the retailer’s Chairman, is to step down and be replaced by Mike McTighe, whilst Dave Williams will succeed Lawrence Coppock as Chief Financial Officer.
Harris Associates and Crystal Amber, JJB’s two biggest shareholders, have agreed with Investco Perpetual, the major shareholder in Crystal Amber, and Bill & Melinda Gates Foundation Trust and Golden Peaks Capital, the proposed investors, to raise new capital through a firm placing and open offer at five pence per ordinary share.
In a statement made public today, JJB said: “Each of the company’s key stakeholders welcomes the steps taken by management to strengthen the short-term financing of the business and each has expressed its continued support for the business.
“In particular, the company remains an important strategic partner of Adidas group and Nike, who remain supportive of JJB Sports and its future plans.”
At the beginning of the month JJB warned that it would not meet the repayments on its revolving credit facility due to a reduction in trade caused by heavy snowfall.
An agreement has now been meet with the retailer’s lender Bank of Scotland to waive the January 2011 covenant tests in the company’s £25 million revolving facility on the basis of the proposed capital raising.
JJB also confirmed that certain proposed investors are likely to be offered non-executive board representation once the new capital has been raised.