JJB Sports has confirmed it will look to raise £50 million to help support its turnaround plans, after it emerged that chairman Sir David Jones borrowed £1.5m from Mike Ashley, the deputy chairman of rival Sports Direct.
This morning JJB Sports said that it was looking at a range of options to raise capital for the group, including selling off more non-core assets, extending the company’s working capital facility, as well as placing an open offer, following reports over the weekend that it was finalising a £50m rights issue.
The company also said that 41 of the 53 fitness club leases that the company sold to Dave Whelan had been assigned to his company, Dave Whelan Sports.
It added that around £17.6 million of the £33.9m due to it from the sale to Whelan had now been paid. This will be used to repay JJB Sports’ loan with Barclays bank ahead of the maturity date of August 31.
Separately, The Sunday Times reported Ashley had lent Jones £1.5 million after former JJB chief executive Chris Ronnie told Ashley that Jones was experiencing temporary personal financial difficulties.
According to a letter seen by the newspaper, the interest-free loan was sent to Jones’ account in October 2007 and was due to be paid back by November 1 but repayment was delayed and renegotiated, with Jones agreeing pay by June 30 2010 with 2% interest.
A spokesman for Jones denied he had financial difficulties and said that the money was used to raise funds for a software company, Advance Network Technologies.
The report also said that the Financial Services Authority had discontinued its investigation into Ronnie’s controversial share sale.