UK: Restructuring firm Hilco seizes control of HMV through debt deal
PUBLISHED: 13:32 22 January 2013 | UPDATED: 12:28 23 January 2013
STRUGGLING music and DVD retailer HMV was thrown a lifeline today as its debt was acquired by restructuring specialist Hilco.
News of the development came a day after Hilco was appointed as an adviser to HMV’s administators, from the accountancy firm Deloitte.
The move effectively gives Hilco control over HMV and gives Deloitte more time to secure the future of the 92-year-old company, which has 223 stores around the UK, including branches in Ipswich, Bury St Edmunds, Colchester and Chelmsford, and employs more than 4,100 people.
Hilco already owns the HMV Canada business, having acquired it from HMV in 2011 as the UK group off-loaded assets in order to secure new borrowing facilities.
At the time of its collapse into administration, HMV is thought to have owed its banks – Lloyds and RBS – around £176million. However, Hilco is likely have paid substantially less than this to acquire the debt, in view of HMV’s fall into administration.
Following the firm’s collapse, HMV chief executive Trevor Moore said he was confident that management could still secure a future for the chain.
Entertainment giants, including Universal Music, Warner Music and Sony are said to be in favour of a buy-out by Hilco, and are reportedly planning to offer HMV suitors generous credit and supply terms to help maintain its high street presence.
Deloitte said last week it had received more than 50 expressions of interest in HMV, from parties including other retailers, private equity firms and wealthy individuals. Both Deloitte and Hilco declined to comment yesterday.