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Confirmed: HMV goes bust

Tim Ingham
Confirmed: HMV goes bust

The HMV Group has confirmed that its shares are being suspended from the London Stock Exchange with immediate effect as it files for administration.

HMV will continue to trade on the High Street as administrators Deloitte search for a buyer, the firm said tonight.

Reports began circulating earlier this evening that the administration of the company would be confirmed tomorrow morning.

HMV is reported to have asked suppliers for an extra £300m in funding last week to help it pay off debt with its banks, a request which was ultimately refused.

The firm's underlying net debt grew to £176.1m (2011: £163.7m) in the six months to the end of October 2012.

The chain employs around 4,000 workers and has 230 stores around the UK.

A company statement sent to Music Week minutes ago can be read below:

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.

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