The landlords of the 140 JJB Sports stores the sportswear retailer is proposing to close will be able to claim against an aggregate fund of £10 million if they approve the proposed Company Voluntary Agreement (CVA).
JJB Sports said that landlords from the fund would come in two instalments, the first being paid on September 30 and the balance on December 31.
In addition JJB Sports said it had secured a short term £25m loan with Barclays and a medium term £25m revolving facility with the Bank of Scotland. The facilities are only effective if the CVA is approved. JJB Sports is proposing to shareholders to grant warrants to Bank of Scotland for the equivalent of 11 million shares, around 4.5% of the retailer’s total share capital, which would significantly shrink the fee JJB has to pay to the bank for the loan.
Under the CVA, JJB Sports is proposing to close 140 stores and move a further 250 shops onto monthly rents.
“We are very encouraged by the initial feedback from discussions with key stakeholders and hope their continued support will ultimately allow us to focus on realising the full potential of the group’s core sports retail business.”
Sir David Jones, executive chairman, JJB Sports
Details of the CVA were posted to shareholders and landlords last night. Creditors will vote of the CVA proposal on April 27. Shareholder will vote two days later, on April 29.
JJB Sports executive chairman Sir David Jones said: “”This announcement details the continuing steps we are taking to implement the strategy necessary to secure JJB’s long term future.”
“Following the initial announcement of our CVA Proposal we have had a number of discussions with some of our key stakeholders, including our landlords. We are very encouraged by the initial feedback from these discussions with key stakeholders and hope their continued support will ultimately allow us to focus on realising the full potential of the group’s core sports retail business. The board is strongly of the view that the CVA proposal is in the best interests of the group and its stakeholders as a whole.”
The full CVA Proposal Document will be available for download later today from www.jjbsportscorporate.co.uk.