JJB to raise £65m and quit the main Stock Exchange

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JJB Sports has revealed further plans to get its fortunes back on track.

The latest phase of its rescue from the brink of administration will see it de-listed from the London Stock Exchange and joining the “junior” Alternative Investment Mark instead.

It also intends to raise a further £65m by issuing 162.5 million new shares, each priced at 40p.

The moves have been supported by major shareholders, including the Bill and Melinda Gates foundation. The share issue will give JJB Sports some £60m of additional finance once expenses are taken into consideration.

Shareholders must formally approve the plan in a meeting on April 26, but this should be a formality, as those with the biggest stakes - including Harris Associates and Crystal Amber - have already voiced support for the plan.

JJB Sports announced that it was likely to break its banking covenants in December, and predicted dire trading due to excessive snowfall in the run-up to Christmas.

Rival JD Sports had shown an interest in buying JJB, but the offer collapsed and JJB announced it was to restructure with a company voluntary agreement (CVA).

JJB chair 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 fund-raising 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.”