Monday, December 31, 2012

Lenders in debt battle as they plan HMV revival

By Neil Craven, Financial Mail On Sunday

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HMV?s lenders plan to block efforts by turnaround fund Apollo to buy the firm?s debt as they plot a revival of its fortunes.

Music industry sources said Apollo Global Management had been planning to buy the retailer?s debt, which would give it control of HMV.

Apollo has already acquired ten per cent of the debt and must now negotiate with about six banks.

Bruised: HMV in Central London

Bruised: HMV in Central London

However, the lenders are understood to be reluctant to sell their loans too cheaply and are still hopeful that HMV can survive without a takeover.

A source said: ?There is a feeling among the banks that they have come this far, so let?s see it through.?

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Financial Mail reported in June that restructuring firms were looking to take over the debt as a cheap way of gaining control of HMV. Its stock market value is only ?8.6million and the debts are ?176million.

The restructuring firms believe they can overhaul HMV more efficiently off the stock market.

That could mean closing unprofitable stores and making deals with landlords over leases. Next month, HMV faces crunch talks with banks.

It warned just before Christmas that it could miss looming financial targets.

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Source: http://www.dailymail.co.uk/money/news/article-2254598/Lenders-debt-battle-plan-HMV-revival.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

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