LONDON (CelebrityAccess) — Hipgnosis Song Fund Ltd. announced the sale of around 20,000 songs from its accumulated catalog for a grand total of $23.1 million, representing approximately 1% of its overall investment portfolio.
The investment firm identified the music in the sale as ‘non-core songs’ that were part of a planned dispersal that was first announced in September. According to Hipgnosis, the songs were acquired in 2020 as part of the Kobalt Fund One and were bundled with other ‘iconic’ songs that were acquired at the time.
However, Hipgnosis noted that the potential sale of the songs was already part of the company’s acquisition strategy. Hipgnosis also noted that the songs chosen for sale were time-intensive to oversee, imposed ongoing accounting and reporting obligations and do not all have perpetual ownership rights.
The sale reflected a 14.2% discount on the value they contributed to the company’s portfolio based on an independent valuation in September and represents a 9.6x Net Publisher Share multiple.
According to Hipgnosis, the company plans to use its $22 million dollar windfall to pay down its rotating credit facility, creating greater headroom to help it remain in compliance with debt covenants.
Additionally, Hipgnosis announced the appointment of Singer Capital Markets as sole corporate broker and financial adviser and Shot Tower Capital, LLC as lead adviser to conduct due diligence on the Company’s assets as part of its strategic review.
