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JJB agrees a refinancing

JJB Sports yesterday said it had completed its &pound;50m refinancing and ended its standstill agreement with banks, marking the final chapter of the group&rsquo;s recent struggles.<br /><br />Following a crucial deal with landlords &ndash; which will see it pay no rent on stores that have already been closed &ndash; JJB is now able to draw on &pound;50m of new facilities, which are being provided by Bank of Scotland and Barclays.<br /><br />Bank of Scotland is providing &pound;25m long-term working capital which terminates on 30 September 2010, while Barclays is lending &pound;25m in a short-term loan until the end of August.<br /><br />The group intends to repay the Barclays loan with part of the &pound;83m it raised from the sale of its fitness chain to founder and former JJB owner Dave Whelan on 25 March.<br /><br />Executive chairman Sir David Jones, who was parachuted in to lead the embattled group&rsquo;s turnaround in January, said: &ldquo;The successful implementation a deal with landlords last week and the move to our new financing arrangements today are major milestones in securing JJB&rsquo;s longer term future.&rdquo;<br /><br />A more certain outlook for the firm will also mean it can start trading with its suppliers again, and restocking its stores.<br /><br />While the deal save JJB Sports from oblivion, the group said it expects the next few quarters to be tough. A spokesman for the firm said it hopes the restructuring will return the embattled group to profitability in the fourth quarter of this year.<br /><br />The group recently reported revenue fell by 42.1 per cent for the 16 weeks to 17 May, after it posted a &pound;189m loss for the year end to 25 January. Yesterday the group&rsquo;s shares lifted by 4.96 per cent to 37p.