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HMV Group PLC (HMV)

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Friday 20 January, 2012

HMV Group PLC

Group Update

RNS Number : 9359V
HMV Group PLC
20 January 2012
 



  

 

Group update

 

 

HMV Group today announces that its banking syndicate has agreed to amend the covenant package on its existing borrowings. In particular, the banks have agreed to waive the January 2012 covenant test and to re-set tests relating to the 12 month periods ending April and July 2012 with significantly enhanced headroom.

 

The banking group has done this in response to a change in the nature of HMV's relationships

with its key music and film suppliers, which includes the intended grant of warrants representing 2.5% of its equity to these suppliers.

 

This will have a materially positive impact on the Group's profitability and cash flow such that if current trading patterns continue, we now expect, on the basis of our current plans, to be able to reduce the Group's net debt by approximately 50% over the next three years. This reduction in debt is before any assumed disposal proceeds from the ongoing review of the Live business.

 

For the year to 30 April 2012, HMV expects net debt to be £175-180m and in expectation of continuing challenging conditions believes it is now likely to deliver a slightly larger loss of around £10m for the full year.

 

Chief Executive Simon Fox said, "Today's announcement is enormously welcome. These developments represent a material improvement in our financial position relative to the statement we made at the time of our Interim results. The new relationship with our suppliers and the support of our banks will now enable HMV to wholeheartedly focus all of its energies - working in close partnership with its suppliers, on serving the changing needs of its customers ever more effectively. As a key part of this we remain committed to improving our specialist ranging and merchandising of music and DVD whilst also continuing to grow our sales in portable technology and further developing our online and digital offers."

 

David Joseph, Chairman and CEO of Universal Music UK said, "HMV is a vital part of the UK music industry and we are delighted that the support of the film studios and music companies is helping to secure its future. We look forward to working closely with HMV in the years ahead."

 

 

 

Enquiries

HMV Group

Simon Fox, David Wolffe                                 

020 7404 5959*

Brunswick

Mike Smith, Nick Cosgrove

020 7404 5959

 

*All calls via Brunswick

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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