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Creditors approve JJB Sports CVA

Creditors have voted in favour of JJB Sports’ Company Voluntary Agreement (CVA) to safeguard the future of the sportswear chain.

In a meeting this morning, JJB Sports’ CVA proposal was approved by more than 75% of unsecured creditors (by value), in a major step towards securing the the future of the retailer.

JJB Sports’ CVA plans involves the retailer coming out of the leases of 140 stores, and paying the rents on a remaining 250 shops on a monthly rather than quarterly basis.

Creditors included JJB Sports’ major landlords Hammerson, Land Securities and British Land. Landlords will be paid out of a pot of £10million, set aside by JJB Sports, as part of arrangements to end the 140 leases early.

 

“We are delighted by the result of the meetings and the overwhelming support given to the company by our creditors, with every creditor present at the meeting supporting us. The approval of the CVA proposal by creditors is a major step forward in the board’s strategy to secure JJB’s long term future by creating a stable financial platform for the revitalisation of our core sports retail business.”

JJB Sports chairman Sir David Jones

In a statement the company said: “Meetings of creditors were held today to consider the CVA proposal and the Company is pleased to announce that the CVA Proposal was approved without modification by a majority in excess of 75% in value of the unsecured creditors of each of the Company and Blane [JJB Sports subsidiary] present at the meetings.”

A further vote will be held be JJB Sports shareholders on Wednesday. If this does not approve the CVA, the decision of the creditors will prevail, in line with the Insolvency Act 1986. If the CVA proposal is not subject to a successful challenge, it is expected to become effective on or around May 28.

JJB Sports lenders Kaupthing, Barclays and Lloyds said that approval of the CVA was a condition of their continued support.

Chairman Sir David Jones said: “We are delighted by the result of the meetings and the overwhelming support given to the company by our creditors, with every creditor present at the meeting supporting us. The
approval of the CVA proposal by creditors is a major step forward in the board’s strategy to secure JJB’s long term future by creating a stable financial platform for the revitalisation of our core sports retail business.”

British Property Federation chief executive Liz Peace said: “This is a positive result for the many hundreds of people employed by JJB. It is clear evidence that landlords are willing to be flexible to support their tenants and help keep people in their jobs.

“We hope the open and honest manner under which CVA was worked up can become a benchmark for any future agreements. It is vital we have tougher rules around insolvency practice that protect landlords and their own investors and shareholders, as well as ensuring a fair procedure exists to keep firms in business.”

 
 

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