Hilco tightens grip on HMV with debt purchase

Jan 23 2013, 00:17 IST
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Hilco tightens grip on HMV with debt purchase. Reuters Hilco tightens grip on HMV with debt purchase. Reuters
SummaryHilco bought the debt from Lloyds Banking Group and Royal Bank of Scotland

British firm HMV's debt has been bought by Hilco, giving the restructuring specialist a big say in the fate of a 92-year-old entertainment retailer which sought protection from creditors last week.

"The administrators will work closely with them (Hilco)... as we continue to seek a positive outcome for the business," said Nick Edwards at Deloitte, HMV's administrator.

"Stores continue to trade and, at this time, we remain hopeful of securing a long-term future for HMV as a going concern," he said on Tuesday.

HMV's business - selling CDs, DVDs and video games - has struggled in declining markets and amid increased competition from supermarkets and online retailers such as Amazon.

Its move into administration on Jan. 14, which put 4,100 jobs at risk, was the latest blow to an industry which has seen a string of household names such as Comet, JJB Sports, MFI, and Woolworths fall by the wayside in a prolonged consumer downturn.

Hilco, which bought HMV Canada in 2011 and salvaged British home goods firm Habitat, bought the debt from Lloyds Banking Group and Royal Bank of Scotland. HMV had 176 million pounds ($279 million) underlying net debt in October.

Hilco, Lloyds and RBS all declined to comment.

Deloitte has received over 50 expressions of interest in HMV, including from private equity firms. Video games seller Game has said it was interested in some HMV stores.

Hilco has widely been regarded as a frontrunner to take full control of HMV due to its relationship with music labels and film studios through its Canadian business.

On Monday, it was appointed to help Deloitte run the business - HMV has over 200 shops - during the administration process, a source said.

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