UPDATE: JJB Sports Gets 2nd Repayment Extension From Banks

The future of AIM-listed retailers JJB Sports PLC (JJB.LN) and Stylo PLC (STYL.LN) hung in the balance Friday, as JJB again managed to defer a loan repayment, while Stylo appointed administrators after its lenders rejected a rescue deal.

Sportswear retailer JJB said Friday its lenders have again agreed to defer repayment of a loan, provided they remain satisfied with its ongoing attempts to sell its fitness clubs.

JJB is to pay its banks a fee of GBP166,500 for the extension to March 16.

JJB said it reached agreement in December with lenders Barclays PLC (BARC.LN), HBOS PLC (HBOS.LN) and Iceland's Kaupthing to postpone repayment of a GBP20 million loan from Kaupthing originally due Dec. 14. In return the banks asked for GBP8.3 million in fees.

JJB said Friday the GBP166,500 fee payable now will deducted from the GBP8.3 million total.

Following an earlier extension to Feb. 12 agreed Jan. 30, for which JJB also paid GBP166,500, the balance due March and April is GBP8 million, the company said.

The retailer is searching for a buyer for its fitness clubs and Wednesday announced its intention to appoint administrators to two loss-making subsidiaries, Qubefootwear and Original Shoe Co.

Meanwhile, Stylo was dealt a blow when creditors and landlords of its Barratts Shoes and PriceLess Shoe chains refused to back a series of company voluntary arrangements, or CVAs, proposed in January to help the struggling firms cut their rent bills, pay down their debts and continue trading.

Deloitte LLP has been appointed administrator.

Altium Securities analyst David Stoddart said he has kept a "sell" rating on JJB.

In a note to clients, he said JJB's repayment extension being subject to its lenders remaining satisfied with the progress of its proposed Fitness Clubs disposal "hardly represents a ringing endorsement."

Stoddart cautioned that failure to secure an acceptable price would appear to have potentially fatal consequences.

He thinks that even if JJB does secure an acceptable price, he thinks the company's value is still only worth nine pence a share.

At 0924 GMT, JJB Sports shares were 0.25 pence, or 2%, higher at 12.5 pence, while Stylo shares were suspended at 3.75 pence.

Company Web site: www.jjbsports.co.uk; www.stylo.co.uk

-By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [e-mail]

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