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Date: Tuesday 07 Oct 2008

LONDON (ShareCast) - JJB Sports shares tumbled a further 25% yesterday to a record low after one of its credit insurers withdrew cover to its suppliers, while another is discussions with the retail group.

Coface confirmed it would not supply cover to suppliers to JJB Sports for the foreseeable future.

JJB is also reportedly in talks with Atradius, the UK's second-biggest credit insurer, about the strength of its balance sheet in an attempt to avoid having its suppliers' insurance cut. Euler Hermes, Britain's largest credit insurer, is also said to have removed some cover.

JJB shares tumbled last month on claims by HBOS it had breached one of its banking covenants. JJB denied the breach.

Adding to the uncertainty, the firm recently took out a bridging loan with Icelandic bank Kaupthing, which had its shares suspended yesterday on fears over its exposure to the credit crunch.

Credit insurance is used typically to offer protection against the risk of insolvency and pays out on goods supplied to a retailer that subsequently cant pay for them. JJB said the Coface decision “has no affect on our business”.

JJB announced a £9.7m half-year loss on 26 September, which included big losses from two recent acquisitions.

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