Music and games retailer HMV has secured a two-year £220 million (€247 million) refinancing plan that will allow lenders to take a 5 per cent share of the company.
The UK's biggest CD and DVD seller said it won't be paying dividends while a part of the loan is outstanding. Lloyds Banking Group Plc, Royal Bank of Scotland Group Plc and Banco Santander SA are amongst the lenders taking a stake, it was reported last night.
HMV agreed last month to sell its Waterstone's book chain to Russian billionaire Alexander Mamut to satisfy bankers over a July 2nd debt covenant deadline.
Net debt at the company's April year-end was £170 million, or more than three times the company's market value.
"We are very pleased to have concluded the new bank facility, which represents another important milestone in securing the financial stability of the Group,” chief executive officer Simon Fox said in the statement.
HMV is seeking to focus on live music and digital sales to counter the drop in CD and DVD revenue.
It's also trying to sell more electronic devices such as Apple Inc.'s iPods and iPads in stores.
The revised plan, through September 30th, 2013, replaces an existing £240 million funding arrangement, the company said.
Bloomberg
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