Troubled sports retailer JJB Sports has announced plans to raise £65m from a share placement to provide emergency additional funding.
The placement will raise £60m after expenses and will see 162.5 million new shares issued at 40p per share.
JJB’s investors Harris Associates, Crystal Amber, Invesco Asset Management and the Bill & Melinda Gates Foundation Trust will support the placing while broker Numis will underwrite it, the company said.
JJB's shares have bounced 4.4 per cent to 29.75p on the news.
The capital raising will “allow the company to reduce its reliance on the availability of supplier credit and provide the necessary funds for the implementation of the group's revised business plan,” it said.
“Together with the implementation of the CVA and continued availability of our banking facilities with BoS, this fundraising will mark the end of our financial restructuring process,” said JJB chairman Mike McTighe.
“Once complete, it will allow the company to press on with the next stage of implementing its revised business plan and allow management to focus solely on the turnaround of the group's retail business.”
It follows a settlement with its creditor landlords last month to enable it to restructure, and with its lender Bank of Scotland to provide £25m in working capital.
The deal will comprise a firm share placing, a share placing, and an open offer, it said.
It needs shareholder approval and will go to a vote on 26 April.
Lazard and Numis are joint financial advisers.