HMV offloads live venues in £7.3m bid to cut debt

HMV: warnings of "probable" breach of banking agreements
HMV: warnings of "probable" breach of banking agreements
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HMV yesterday sold more of its live music venue business to cut its debt pile and said more disposals are to follow.

The firm said it had sold Mama Group, which owns the HMV Picture House venue on Lothian Road in Edinburgh, and a 50 per cent interest in ticketing business Mean Fiddler to a subsidiary of Lloyds Development Capital.

The deal is for £7.3 million although £3.5m of the purchase price will be deferred for a year. HMV had bought Mama in 2010 for £46m.

HMV, famous for its Nipper the dog trademark, is battling declining music, DVD and games markets and is focused on shifting to growth areas such as technology products, as well as selling off non-core parts of its business.

Proceeds from the sale of Mama, which also owns London venues such as the HMV Forum and the Jazz Cafe as well as festivals including Lovebox and Global Gathering, will be used to pay down debt.

At the end of its 2011-12 financial year, the company owed some £166.7m.

Talks to sell the Gay and Heaven clubs – the remaining parts of its live business – are ongoing.

The sale follows the disposal of its London Hammersmith Apollo live entertainment venue in May for £32m. That move allowed the group to amend and extend its existing £220m bank facility.

HMV, which made a loss of £16.2m last year, has forecast a return to profit in the 2012-13 year.

It is expected to benefit from disruption to rival computer games retailer Game and negotiating better terms with key suppliers.

It is expected to publish half-year results before Christmas. In the 20 weeks ended 15 September, total group sales had declined by 14.8 per cent. Shares in the company closed down 0.05p at 2.5p.