JJB Sports, the sportswear retailer, is planning to raise a significant sum from shareholders in the next four to six weeks, The Times has learnt.

The company, which is being advised by Lazard, the investment bank, is understood to be planning to raise at least £50 million in a placing and firm offer. It is thought that the offer could involve investors being invited to subscribe for new JJB shares at as little as 12p each. That would be a 61 per cent discount to last night’s closing price of 30¾p, which was down 1p.

The fundraising is because of JJB’s need for working capital as it undergoes a turnaround under Sir David Jones, its executive chairman. He is best known in the City for his period as chief executive of Next.

JJB was, in its own words, “dangerously close to insolvency” this year after Kaupthing, the Icelandic bank, which has gone into administration, refused to extend a loan of £20 million to the company. Barclays, one of JJB’s other two lenders, held talks with Hilco, the distressed debt and restructuring specialist, to sell its £20 million worth of debt in the business.

The company was saved in March when JJB agreed to sell its fitness clubs business to a company formed by Dave Whelan, its founder and the owner of Wigan Athletic FC.

Under the terms of the £83.4 million deal, Dave Whelan Sports agreed to pay JJB about £40 million up front, with a further £33.9 million to be paid into an escrow account, the funds of which would be released only after a number of landlords of the clubs had agreed to assign the leases to Mr Whelan’s company. That money is understood to be coming through gradually.

Mr Whelan was also due to pay a further £9.5 million on May 1 to JJB in respect of stock in the fitness business. This is understood to have been paid.

JJB finally looked to have secured its future last month when Barclays and Lloyds Banking Group, two of its three lenders, each agreed to lend the company £25 million, as it was able to repay its outstanding loan from Kaupthing with that money.

Barclays is due to receive payment in full at the end of August with the deferred proceeds from the sale of the fitness clubs. Lloyds, which now owns JJB’s original lender HBOS, has granted the company a £25 million working capital facility that terminates at the end of September next year.

However, JJB is understood to believe that the recent recovery in stock markets — which have seen a number of retailers, including Debenhams and Sainsbury’s, raise money for opportunistic purposes — has made it an appropriate time for it to seek new capital from investors.

It is thought that, while the company is experiencing tough trading in line with the rest of the high street, Sir David is keen to accelerate the re-stocking of its high street stores.

JJB told analysts at the time of its annual results announcement in May that a lack of stock was hampering its short-term ability to improve sales.

The company, which made a pre-tax loss of £189.2 million in the year to January 25, said at the time that it did not expect to enjoy any improvement in trading until the fourth quarter of this year. It also disclosed that, in the 16 weeks to May 17 this year, its revenues fell by 42.1 per cent in total and by 23.3 per cent on a like-for-like basis.

At the time, Sir David said: “I really do believe we can survive. If I didn’t think we could survive, I wouldn’t be wasting my time.”

Sir David, widely respected for his time at Next, also won City plaudits for his handling of a tricky management succession at Wm Morrison, the grocer, in which Ken Morrison, the chairman, handed over the reins to Marc Bolland, the chief executive.

Sir David said after last month’s restructuring of the company’s loans that a “major milestone” had been achieved in securing JJB’s longer-term future.

JJB declined to comment last night.

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