Restructuring firm Hilco buys HMV debt
Tuesday 22 January 2013
Hopes over the future of collapsed music chain HMV were raised today after its debt was bought by the restructuring business behind HMV Canada.
Hilco UK has taken on the debt from lenders Lloyds and Royal Bank of Scotland in a move effectively giving it control of the business.
It comes after Hilco was appointed adviser to HMV's administrator Deloitte yesterday.
The move should give administrators more time to secure the future of the 92-year-old company and will bring some certainty for the business.
Entertainment giants, including Universal Music, Warner Music and Sony, are said to be in favour of a buyout by Hilco. The suppliers are reportedly planning to offer HMV suitors generous credit terms and cut the price of CDs and DVDs to help keep HMV's presence on the high street.
Hilco, which is best known for its recent rescue of furnishings group Habitat, has been linked to the company since it hit the wall last week, putting more than 4,120 jobs and 223 stores at risk.
Deloitte said last week it had received well over 50 expressions of interest from parties including other retailers, private equity firms and wealthy individuals.
Game confirmed it was among 50 potential suitors circling the collapsed music entertainment business, and private equity veteran Jon Moulton was also linked through his Better Capital firm.
Following the firm's collapse HMV chief executive Trevor Moore said he was confident that management could still secure a future for the chain.
Hilco UK, which also owns the Denby pottery firm, was founded out of a partnership between UK management and the distressed retail and advisory firm Hilco Group in the US.
HMV sold its 121 stores in Canada to Hilco for £2 million in 2011, which at the time allowed the company to secure a new £220 million borrowing facility.
The news comes after HMV's administrators yesterday bowed to public pressure and said they will accept gift cards at the collapsed music chain.
Despite HMV continuing to sell gift cards until the day before the music chain collapsed, administrators Deloitte stopped accepting them once appointed to the business last week.
Hilco and Deloitte declined to comment.
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