The HMV Group, which employs 4,000 workers across 230 UK stores, is now on the brink of collapse – as the historic retailer officially files for administration.
The PLC’s shares have been frozen on the London Stock Exchange as a result of the news, which comes after its net debt grew to £176.1m (2011: £163.7m) in the six months to the end of October 2012.
Administrator Deloitte said it would continue to search for a buyer. After lending HMV emergency financial support in recent months, entertainment suppliers to the retailer were last week asked to contribute a further £300m in funding to bail it out – but it was a bridge too far.
An HMV company company statement can be read below:
On 13 December 2012, [HMV] announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.
Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company’s ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.Music Business Worldwide