UK music retailer files for administration
15th January 2013
HMV Group, the UKís last major music retailer, has confirmed that its shares are being suspended from the London Stock Exchange as it files for administration. The company will continue to trade as administrators Deloitte seek a purchaser for the business.
The 92-year-old company saw its underlying net debt grow to £176.1m (2011: £163.7m) in the six months to the end of October 2012.
The retailer has 230 stores across the UK and Ireland with over 4,000 staff.
A statement sent to Music Week read:
On 13 December 2012, [HMV] announced that as a result of current market trading conditions, the Company faced material uncertainties and that it was probable that the Group would not comply with its banking covenants at the end of January 2013. The Company also stated that it was in discussions with its banks.
Since that date, the Company has continued the discussions with its banks and other key stakeholders to remedy the imminent covenant breach. However, the Board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the Company and certain of its subsidiaries with immediate effect.
The Directors of the Company understand that it is the intention of the administrators, once appointed, to continue to trade whilst they seek a purchaser for the business.
It is proposed that Nick Edwards, Neville Kahn and Rob Harding, partners of Deloitte LLP, will be appointed as the administrators of the Company and certain of its subsidiaries.
The Company's ordinary shares will be suspended from trading on the London Stock Exchange with immediate effect.