LAZARUSWATCH: HMV is going to be absolutely fine now
HMV, 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.