HMV Puts Venues On The Block
British retailer HMV has put its 13 concert venues and various festivals on the block in a bid to cut some of its £164 million ($256 million) debt.
The news came a day after the retail chain/360-degree music company told the market its first-half losses are close to £36.4 million ($56.4 million).
HMV’s share price duly took another knock, falling 0.97 pence to 2.9 pence. That values the company at £12.3 million ($19.2 million).
In the summer the company staved off lenders including Lloyds Bank and Royal Bank Of Scotland by selling off its Waterstone’s book chain for £53 million.
In addition to the current debt, the rent on nearly 250 of HMV’s high street shops falls due at the end of the month.
Since April it’s believed major music companies such as Universal, Warner, EMI and Sony have been supplying CDs to HMV without the retail giant having to make up-front payments.
HMV chief exec Simon Fox has cast “significant doubt” about the company’s ability to “continue as a going concern.”
The 13-strong portfolio of concert venues, which includes London’s Hammersmith Apollo and Kentish Town Forum, and festivals including Lovebox and The Great Escape, could fetch about £60 million.
The package basically includes the concert venues and outdoor events HMV picked up when buying out partner Mama Group in February 2010.
Selling HMV Live would cut debt by more than one-third, but that’s one part of the group that’s still turning a profit. CDs and DVD retail, which is still HMV’s core business, has shown an 11 percent downturn since last year.
UK business analysts reckon HMV’s best chance of survival is either a rights issue or intervention from a global corporate such as Universal that’s willing to rescue the business.
Becoming part of Universal would put HMV back in the same stable as former owner EMI, which sold its recorded music business to the Vivendi-owned company in November.