Hilco tightens grip on HMV with debt purchase
LONDON (Reuters) - British entertainment retailer HMV's debt has been bought by Hilco, giving the restructuring specialist a big say in the fate of the 92-year-old group which sought protection from creditors last week.
"Hilco UK confirms that it has acquired HMV's debt from the group's lenders. It has not bought the business itself," Hilco said on its website on Tuesday.
"Hilco believes there to be a viable underlying HMV business and will now be working closely with Deloitte who, as administrators, are reviewing the business to determine future options."
HMV's business of selling CDs, DVDs and video games has struggled in declining markets and amid increasing competition from supermarkets and online retailers such as Amazon.Com Inc.
Its move into administration on January 14 put 4,100 jobs at risk and dealt the latest blow to a retail sector which has seen a string of household names such as Comet, JJB Sports, MFI, and Woolworths fall by the wayside.
Hilco, which bought HMV Canada in 2011 and salvaged British homewares firm Habitat, bought the debt from Lloyds Banking Group and Royal Bank of Scotland. HMV had 176 million pounds ($279 million) of underlying net debt in October.
Lloyds and RBS declined to comment.
"Stores continue to trade and, at this time, we remain hopeful of securing a long-term future for HMV as a going concern," said Nick Edwards at Deloitte.
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 had been widely 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 200-stores business during the administration, a source said.
(Reporting by Neil Maidment; Additional reporting by Brenda Goh; Editing by Dan Lalor and David Holmes)
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