New York-based investment group Apollo Global Management has bought a 10% holding in struggling U.K. music retailer HMV, with a possible view to acquiring the company, according to reports. .
Apollo Global Management — commonly referred to as a vulture fund — purchased 10% of HMV Group’s debt from Allied Irish Banks last week, according to the Telegraph. The investment, which is said to be in excess of £20 million ($32.4 million), has led to speculation that Apollo is looking to acquire the troubled retail group, which has seen its market value plummet to £10 million on the stock market.
Last week, HMV published its first-half results for the six months ending Oct. 27. The company reported a £36.1 million ($58.5 million) first-half loss, with total sales falling 13.5% to £288.6 million ($467.7 million), from £333.7 million ($540.8 million) in the same period the previous year. The group’s underlying net debt grew to £176.1 million ($285.4 million).
In light of the disappointing figures, the retailer announced that it faced “a probable” breach of its January banking covenants, with chief executive Trevor Moore warning that “current market trading conditions result in material uncertainties facing the business.”
Earlier this year, HMV sold a number of its live music assets in an attempt to reduce its debt. The sale of its flagship venue, London’s Hammersmith Apollo, to American-German joint venture Stage C was completed this summer for £32 million ($51.9 million). This fall, the company also sold its stakes in London venues the Barfly and Jazz Café, as well as Manchester’s The Ritz venue and UK festivals Lovebox, Global Gathering and Great Escape.
Both HMV and Apollo Global Management declined to comment when contacted by Billboard.biz.