JJB Still Struggling

JJB Sports has revealed details of its second proposed company voluntary arrangement (CVA), as the troubled chain looks to restructure.

JJB’s board will propose a CVA  to its unsecured creditors and shareholders. The process will see 45 underperforming stores shut over the next 12 months with an option to close a further 50 stores during the next two years.  Insolvency firm KPMG have got the appointment.

In a statement JJB said it has had an open and constructive dialogue with major landlords, representing around 40 per cent of the group's annual rental payments, regarding the future shape of the group's property portfolio.

The CVA proposals will provide for liabilities to unsecured creditors other than the landlords to continue to be paid in full.

The proposed restructuring will be conditional on both a £31.5m equity capital raising and the continued provision of banking facilities.

The statement followed news that rival retailer JD Sports is in talks over making a takeover bid for JJB Sports.

JD has said it is in "early stage discussions" with JJB's board about launching an offer.

Mike McTighe, JJB chairman, said, "The board and management team are working urgently on a fundamental restructuring plan which will significantly strengthen JJB's finances and build on the group’s strengths.

“We are confident that, with the support of our key stakeholders, we can complete this restructuring in the coming weeks.”

The proposed restructuring will also be conditional on both a further equity capital raising, to be launched after completion of the current capital raising, and the continued provision of banking facilities.

JJB’s first CVA, also created by KMPG, was approved in April 2009.

Posted at 04:42PM Feb 15, 2011 by Marc Stenton in Insolvency  |  Comments[0]