Recession-battered retailer JJB Sports has confirmed details of a GBP100m (US$158m) rights issue designed to boost the company's future trading position.

Details of the GBP100m equity issue, involving the issue of 400m new shares at 25p each, had been delayed late last week by rumours about the financial affairs of JJB's executive chairman, Sir David Jones.

But JJB said an investigation had shown the rumours to be "totally unfounded", adding: "The board remains fully supportive of Sir David Jones and committed to proceeding with a capital raising."

A prospectus for the rights issue has been approved and posted to qualifying shareholders, and the issue will be voted on at a general meeting of JJB on 29 October.

The company said the capital injection would provide management with greater operational flexibility, reducing JJB's reliance on supplier credit and allowing it to rebuild stock levels into 2010.

The money will also help the company to implement its "Serious about Sport" strategy, which is designed to restore its trading fortunes.

"This capital raising represents a new beginning for JJB Sports," said Sir David Jones.

"On behalf of the board I am delighted to put these plans in front of shareholders in the strong belief it will forge our path into the future."