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JJB Sports PLC outlines plans for CVA
27
Mar '09
JJB Sports PLC, one of the UK's leading high street sports retailers, announces a series of measures intended to address the Group's current financial difficulties and to create a stable financial platform for the revitalisation of its core sports retail business.

Highlights
• Disposal of the Fitness Clubs business (including the fitness clubs and attached retail stores, the Cardiff MiFit fitness club and retail store and certain committed fitness club sites) (the "Fitness Business") and related stock to Dave Whelan Sports Limited, a company controlled by Mr David Whelan, for an approximate total cash consideration of £83.4 million (the "Disposal").

• Waiver granted by the United Kingdom Listing Authority (the "UKLA") under Listing Rule 10.8, available only for companies in severe financial difficulty, in respect of the requirement to issue a circular and obtain shareholder approval for the Disposal.

• Proceeds of the Disposal will initially reduce the Company's borrowings under its working capital facilities, but will ultimately be used to fund the Company's short term working capital requirements.

• All March quarterly rents will be paid in full, following which the Company will propose a company voluntary arrangement ("CVA") to compromise claims of landlords of approximately 140 closed retail stores and temporarily vary the terms of the leases of approximately 250 open retail stores to permit monthly rent payments (the "CVA Proposal").

• Further extension of the standstill arrangements with the Company's existing lenders, Barclays, Lloyds (formerly HBOS) and Kaupthing Singer & Friedlander Limited (in administration) (the "Lenders") until the CVA Proposal has been approved and become effective, conditional, inter alia, upon receipt of deferred consideration from Dave Whelan Sports Limited in accordance with the terms of the transaction documentation and on the Lenders remaining satisfied with the progress of the CVA Proposal and the trading performance of the Company.

• Conditional upon the CVA Proposal being approved and becoming effective, proposed new funding arrangements through a short term £25 million term loan with Barclays and a medium term £25 million working capital facility with Lloyds, together with a possible issue of warrants to Lloyds in connection with their continuing support of the business.

• Board changes including the dismissal of Christopher Ronnie, former Chief Executive, announcement of intention to resign by David Madeley, Finance Director and appointment of Richard Manning as Legal Director and Company Secretary.

• "Serious about Sport" strategy under the leadership of Sir David Jones to revitalise the Continuing Group's core retail business and reposition it in the market place.

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