UK: JJB gets backing for rescue plan
JJB says Nike and Adidas are behind its plans
Key investors in UK sporting goods retailer JJB Sports have backed a rescue plan that includes raising an extra GBP65m (US$104m) in funds - as long as it can cut a deal with landlords.
The company said this morning that it has secured support from each of its major shareholders - Harris Associates, Crystal Amber, Invesco Asset Management and Bill & Melinda Gates Foundation Trust - to take part in the capital raising.
However, the move to raise more money will only go ahead if JJB's plans for a company voluntary arrangement (CVA) is approved at a meeting of creditors and shareholders next week (22 March).
The CVA proposals, outlined earlier this month, want landlords to accept a 50% reduction in monthly rent on 89 stores, plus an additional amount for turnover rent, insurance and service charge. They are also being offered a share in the value of a restructured JJB of between GBP2.5m and GBP7.5m, payable in two years' time.
The CVA would allow JJB to pay owners of current outlets on a monthly, rather than quarterly, basis for the next two years.
Today (15 March) the retailer said suppliers including Adidas Group and Nike "remain strongly supportive of JJB and its future plans." It has also has agreed a loan of GBP25m until 31 May 2014 with Bank of Scotland.
JJB, which last week saw takeover interest from UK rival JD Sports fade, said trade has achieved "internal expectations" - with "very encouraging results" from six transformed stores.
"JJB's restructuring continues as planned," notes chairman Mike McTighe. "The whole management team remains focused on this restructuring and committed to delivering a stable future for JJB and its employees.
"The next key stage in the process is the creditor and shareholder votes next week. The board remains confident of the success of this turnaround and the future prospects for the company."
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