KPMG to advise troubled HMV on debt
Big Four firm KPMG expected to be called in for debt advice at music retailer HMV as the group risks breaching banking covenants.
KPMG IS SET to be appointed as debt adviser to struggling music retailer HMV after the group admitted that credit insurance to its suppliers had been reduced and it was in danger of breaching banking covenants.
The Big Four firm will assess the risk of a covenant breach, according to the Financial Times, although KPMG has declined to comment on its potential appointment.
HMV told the FT that it had taken specialist debt advice every year since the group was formed and would continue to do so given its recent announcement on debt covenants.
In its interim management statement earlier this month, HMV said: “Given the difficult trading conditions over Christmas and the likely outturn for the year, the board now expects that compliance with the April covenant test under the group’s bank facility will be tight and is taking further mitigating actions during the next four months to address this.”
The group plans to close 60 stores in an attempt to slash costs. The group has an underlying net debt of £151m, according to its interim results in December, and a market capitalisation of £108m.