LAZARUSWATCH: HMV is going to be absolutely fine now

hmvHMV, once worth hundreds of millions, now not, look to be absolutely fine now that they've cut a deal with its banks.

The firm cheerily said: "The banks have agreed to waive the January 2012 covenant test and to re-set tests relating to the 12 month periods ending April and July 2012 with significantly enhanced headroom"

HMV expects debt at the year-end to be £175-180 million and "in expectation of continuing challenging conditions" forecast a loss of about £10m. So that's great news isn't it? Rude health and all that.

Apparently, the banks agreed to these changes after HMV changed their relationships with key music and film suppliers. These changes include the intended grant of warrants representing 2.5 percent of HMV'S equity to these suppliers, who include Vivendi owned Universal Music UK. Whatever that means.

"This will have a materially positive impact on the group's profitability and cash flow such that if current trading patterns continue, we now expect, on the basis of our current plans, to be able to reduce the group's net debt by approximately 50 percent over the next three years," said HMV.

In short, everything is absolutely fine.


  • Kevin
    That's good for now but will only means it will cost the banks even more in the long run. Which I guess they think is a fair gamble. Especially if HMV doesn't need to sell of it's live music venues etc as that's one of the few valuable assets it has to get them out of the mess. Giving some of the company to the studios to keep rights is a good way of enforcing good deals for the future and no unexpected costs coming from them. They seriously need to change their ways though. The prices are too high, the differences between the online and high street (although obviously different companies) need to be addressed one way or another and they need to stop expecting everyone to shell out hand over fist for the latest 'blockbuster' Start ata reasonable price and more people will buy it leaving you ahead overall!
  • Frank
    not sure if serious......
  • Dick
    Their online stock levels are crap. I tried to buy a number of DVDs and BRs with the £20 livingsocial vouchers (I had £80 worth). Every one was out of stock, but HMV said they could order in. Two weeks later, still no joy. They were not even hard to get ones, I just wanted rid of vouchers. In the end I went for a load of Disney ones for the kids. More expensive than elsewhere, but at least I got rid of the vouchers.
  • Chewbacca
    @Dick Similar story here, although the website claimed the stuff I was trying to buy WAS in stock. 5 days later, my order is still "waiting stock allocation". Tried to complain but they don't appear to give a toss and haven't replied.
  • Stu_
    and watch everyone dump their shares once they hit 200% markup in an hour! So now they're only up 96% on the day, about what they were a month ago :S
  • Sicknote
    As with the last deal they did with the banks; the only thing they now have is a shovel with a longer handle. Keep digging HMV.......
  • Cheesey
    All the online stock is sitting on the shopfloors, being kicked by irate customers who find the pile-the-crap-up-so-that-the-aisle-is-12-inches-wide incredibly annoying. I agree it's putting off the inevitable. Maybe they could update their stores to look less like glum emo-dens?
  • Sicknote
    Maybe in the Moorgate branch they could remove the massively overweight male employee who stands in the front shop doorway with his shirt saying "...revenue protection.." or some other crap to intimidate suit wearing city workers. What are they expecting; a smash & grab by the futures team from Barclays Capital......?

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