HMV Struggles For Quick Fix
HMV’s efforts to solve its cash crisis by selling its Waterstone’s book business to Russian billionaire Alexander Mamut may have hit a snag over the price, according to The Independent.
The retail chain/360-degree music business has been given a stay of execution regarding meeting its bank covenants, but it seems the same banks also want more than Mamut is offering for the 297-store book business.
The two sides are believed to be poles apart on their valuations of Waterstone’s, the paper said. Mamut is thought to have offered between £35 million and £40 million, while the bankers are said to be looking at a figure nearer to £70 million.
Mamut’s exclusivity period on bidding for Waterstone’s has ended and the talks with the banks are said to have ended with it. It may be that the Russian oligarch, who owns 6 percent of HMV, can still reach a deal for the book chain but it’s likely the banks are starting talks with other bidders.
HMV’s consortium of banks wants £75 million in order to restructure its £130 million debt. The sale of its 128-store Canadian business is unlikely to raise more than £5 million.
If HMV can’t sell Waterstone’s, it may be forced to implement a controversial insolvency procedure to slash its property costs.
On 22 April HMV admitted that it was considering a company voluntary arrangement, which could mean the group would need to close even more stores.