Tuesday, June 07, 2011

Breaking news: HMV refinances

BBC News is just reporting that HMV has agreed a refinancing deal with its bankers, which will allow the chain to limp a while longer.

The package is made up of separate £70m and £90m loans, and a £60m credit facility, which can be called upon if needed.
That's good, right?
But the company faces an "exit fee" due on the £90m loan when it is repaid, which would rise to 14% by January 2013 if the loan has not been repaid by then.
Oh. So it's pretty expensive money, then - potentially company-destroying money if HMV doesn't have a solid plan to turn itself around.

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