RICHARD Bernstein, a director of JJB Sports’ second biggest shareholder, needs to be convinced that the firm has a viable recovery plan before he will stump up for his share of a planned £100m rescue rights issue, he told City A.M. yesterday.
“We’re looking to put in money if we were asked, provided there’s a credible plan,” he said.
Bernstein’s Crystal Amber Asset Management, which owns 15.8 per cent of JJB Group, has also demanded a seat on the board of the troubled sports retailer in order to steer it towards recovery.
Others said to be considering their options over the rights issue include JJB’s biggest investor Harris Associates, which owns 20 per cent of the stock, and the Bill and Melinda Gates Foundation, which owns five per cent.
JJB released a statement on Friday announcing that it is likely to breach its £25m financial covenant with the Bank of Scotland at its next test in January.
Its most recent financial statement puts net debt at £16.6m and while sales are up 13 per cent on last year the increase has been by less than anticipated, in part due to the bad weather.
The group has also had to contend with investigations by the Financial Services Authority and the Serious Fraud Office, contributing to a halving of its share price since early November.