RNS Number : 1249J
HMV Group PLC
27 June 2011
HMV Group plc
Sale of HMV Canada
27 June 2011
HMV Group plc today announces that it has agreed to sell its HMV Canada business to Hilco UK for total cash consideration of £2.0m.
Commenting on the sale, Simon Fox, Chief Executive of HMV Group, said:
"The Board has fully explored the options available to it for HMV Canada, and believes that a sale to Hilco is the correct decision for the business at this time, whilst reducing the operating leverage in the continuing Group."
"Having received shareholder approval for the disposal of Waterstone's, and with a refinancing in place, the Group is focusing on clear and tightly defined plans for transforming HMV into a broad-based entertainment business."
About HMV Canada
HMV Canada's first store opened in 1986, from which it has grown to become a Canadian entertainment market leader with 121 stores from Newfoundland to British Columbia, including flagship stores in Toronto, Edmonton, Montreal and Vancouver, as well as the hmv.ca website. HMV Canada is an innovator in its markets, launching in 2009 hmvdigital.ca, an MP3 digital music store offering over 10 million tracks for download, and in 2010 the HMV Pure loyalty scheme, which has attracted over 600,000 cardholders. HMV has been named Canadian Music Retailer of the Year for the past 19 years, and has also been recognised as the Canadian Entertainment Network DVD Retailer of the Year. For the year ended 24 April 2010, HMV Canada generated sales of £222m, operating profit of £2.3m and operated with gross assets of £47.3m.
Principal Terms and Conditions of the Disposal
Shares in respect of HMV Canada have been sold to HUK 10 Ltd, a special purpose vehicle of Hilco UK.
Following the sale, HMV Music Limited will retain part of the intercompany debt owed to it by HMV Canada, Inc. In addition, HMV (IP) Limited will provide a licence to HMV Canada, Inc. to use certain intellectual property rights and domain names following completion of the sale.
Financial Effects and Use of Proceeds
It is anticipated that the proceeds from the sale will be used to reduce the Group's net debt.
HMV Group plc +44 20 7404 5959
Simon Fox, Group Chief Executive
David Wolffe, Group Finance Director
Paul Barker, Director of Corporate Communications
Brunswick +44 20 7404 5959
Mike Smith / Laura Cummings /Nick Cosgrove
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