HMV sells Canadian arm for £2 million
HMV Group has sold its 121 stores in Canada to Hilco UK for £2 million in an effort to reduce its debt and to stay in business.
HMV, which has issued four profit warnings this year, said that the company would retain part of the intercompany debt owed to it by HMV Canada and also provide a licence to the business to use certain intellectual property rights and domain names following completion of the sale.
For the year ended 24 April 2010, HMV Canada generated sales of £222 million, with an operating profit of £2.3 million and gross assets of £47.3 million.
The move follows the sale of HMV’s Waterstones book shop chain last month to Russian billionaire Alexander Mamut £53 million.
Chief executive Simon Fox said: "The board has fully explored the options available to it for HMV Canada, and believes that a sale to Hilco is the correct decision for the business at this time, whilst reducing the operating leverage in the continuing group."
He added: "The group is focusing on clear and tightly defined plans for transforming HMV into a broad-based entertainment business."
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