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HMV preparing presentation for banks

By | Published on Thursday 17 March 2011


HMV bosses are busy preparing a presentation for their bankers which is due to be presented next week, according to City AM. The presentation will presumably set out the short term future for the retail and entertainment group, and will encourage money lenders to relax the rules associated with the firm’s current debts.

HMV, of course, is set to next month fail a key covenant of its £240 million bank loan facility, which we now know is that annual gross earnings must exceed the retailer’s rent bill. As previously reported, the music firm has been consulting both KPMG and Deloitte, as well as meeting with its money-lenders, in a bid to renegotiate those loan terms.

HMV has, of course, being pursuing a diversification strategy in recent years, extending the comapny’s interests in digital, live and artist management. Although it’s a sensible strategy given the state of entertainment retail, the firm’s flagging high street business continues to cause problems, which is particularly problematic when combined with the debts created by the diversification strategy.