LONDON (CelebrityAccess MediaWire) — U.K.-based music retailed HMV has sold an equity stake in the company to suppliers, including Universial Music in an effort to solidify their financial position for the next three years.
According to The Guardian, HMV has sold a 2.5% stake to their suppliers in the form of warrants, but the company declined to comment on the other terms of the agreement, which likely entail a shifting of some risk to suppliers.
HMV is the only remaining nationwide chain of music and DVDs in the UK. The company's stock tanked over the past year but 90% but doubled to 4.75at following the announcement last week.
While the full list of HMV's suppliers was not identified, the list is believed to include Universal Music, EMI, Warner Brothers, Sony Music, Universal Pictures and Disney but not suppliers of game consoles, which might lead to a shift in HMV's retail focus away from games.
Along with the equity sale, HMV also received a reprieve from their creditors in the banking community with loan terms relaxed. HMV last saw a relaxation of debt convenants just seven months ago with a deal led by the Royal Bank of Scotland and Lloyds Banking Group.
"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," David Joseph, executive chairman of Universal Music UK told The Guardian. – CelebrityAccess Staff Writers
