JJB Sports is going to try to help resolve its liquidity problems by raising at least £31.5 million (€36.7m-$49.0m) in equity financing, with one of the new investors being the Bill and Melinda Gates Foundation Trust. The company is also seeing some management changes, with John Clare stepping down as chairman and Lawrence Coppock leaving as finance director. Clare's successor will be Mike McTighe, once head of global operations at Cable & Wireless Plc., and Coppock will be replaced by Dave Williams, who used to be with TJ Hughes, the British operator of discount stores formerly owned by JJB.
Clare said in a statement that he suggested the change at the top, as the company needed someone with restructuring experience to complement the retail experience of Keith Jones, JJB's chief executive.
The company's main shareholders have approved of the plan to boost the equity, and its lender, the Bank of Scotland, has said it will waive a test of banking covenants scheduled for this month. In early December, JJB said that it would not meet the repayments on its revolving credit facility because of a drop in business related to heavy snowfall.
Among JJB's big shareholders, Harris Association (19 percent stake) will invest £11.9 million (€13.9m-$18.5m) in the fund-raising; Crystal Amber Fund will invest £4.5 million (€5.2m-$7.0m); Invesco Perpetual will chip in £11.6 million (€13.5m-$18.0m), and GoldenPeaks Capital will contribute £2 million (€2.3m-$3.1m). The Gates organization is expected to invest £1.5 million (€1.7m-$2.3m).
JJB also said that some proposed investors will probably be offered non-executive board representation once the new capital has been raised.
