LONDON - Struggling entertainment retailer HMV Group PLC said Friday it is selling its Waterstone's bookshops to raise 53 million pounds ($86 million).
The sale of the bookstore chain to A&NN Capital Fund Management Ltd. comes ahead of a July 2 deadline for HMV to meet commitments on bank loans.
Russian billionaire Alexander Mamut, who holds a 6.7 percent stake in HMV, also has an interest in A&NN.
"The sale of Waterstone's will enable management to focus more closely on executing the turnaround at HMV and continuing to develop the HMV customer offering," said HMV, which faces which faces stiff competition from supermarkets and internet sellers.
HMV shares were up 10.4 percent at 11 pence in early trading on the London Stock Exchange. The shares traded at 66.5 pence as recently as Sept. 8.
HMV disclosed that Waterstone's sales were down 4 percent on a comparable stores basis in the 53 weeks ending April 30. HMV games and music sales were down nearly 14 percent.
In the latest 17 weeks, Waterstone's sales were down 8 percent while the music and games stores' sales slid by more than 13 percent.
The sale is subject to approval by HMV shareholders, the pension trustee, the Pensions Regulator and HMV Group's lending banks. A renegotiation of the group's lending facilities will also be needed.