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Struggling HMV secures future with refinancing agreement

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by Kay Mitchell

Shares in troubled music, books and games retailer HMV have risen today after it emerged that it has secured a new refinancing deal with its lenders.

The deal, worth £220 million, will see the taxpayer taking a stake in the company.

The group’s main lenders are taxpayer-backed Royal Bank of Scotland and Lloyds Banking Group.

Meanwhile, the announcement comes just a month after HMV announced it will sell its Waterstone’s bookshops to Russian billionaire Alexander Mamut for £53 million.

HMV issued three profit warnings in as many months, and announced it would close 60 stores, as it continues to struggle amid tough competition from supermarkets and internet companies, such as Amazon.

Chief executive, Simon Fox, said the agreement “represents another important milestone in securing the financial stability of the group”.

The £220 million deal comprises two separate £70 million and £90 million loans, and a £60 million credit facility, which can be called upon if required.

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News posted: June 7, 2011

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