JJB agrees a refinancing
JJB Sports yesterday said it had completed its £50m refinancing and ended its standstill agreement with banks, marking the final chapter of the group’s recent struggles.
Following a crucial deal with landlords – which will see it pay no rent on stores that have already been closed – JJB is now able to draw on £50m of new facilities, which are being provided by Bank of Scotland and Barclays.
Bank of Scotland is providing £25m long-term working capital which terminates on 30 September 2010, while Barclays is lending £25m in a short-term loan until the end of August.
The group intends to repay the Barclays loan with part of the £83m it raised from the sale of its fitness chain to founder and former JJB owner Dave Whelan on 25 March.
Executive chairman Sir David Jones, who was parachuted in to lead the embattled group’s turnaround in January, said: “The successful implementation a deal with landlords last week and the move to our new financing arrangements today are major milestones in securing JJB’s longer term future.”
A more certain outlook for the firm will also mean it can start trading with its suppliers again, and restocking its stores.
While the deal save JJB Sports from oblivion, the group said it expects the next few quarters to be tough. A spokesman for the firm said it hopes the restructuring will return the embattled group to profitability in the fourth quarter of this year.
The group recently reported revenue fell by 42.1 per cent for the 16 weeks to 17 May, after it posted a £189m loss for the year end to 25 January. Yesterday the group’s shares lifted by 4.96 per cent to 37p.