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(Alliance News) - Hipgnosis Songs Fund PLC on Monday said it completed the sale of a batch of around 20,000 "non-core" songs to pay down debt and provide "greater headroom".
The London-listed music investment company finalised the USD23.1 million sale, which it said represents a value of around 1% of its total investment portfolio. However, the consideration is a roughly 14% discount based on its September valuation.
The company has said that the net proceeds of approximately USD22.6 million will be used to pay down revolving credit facility drawings, providing "greater headroom".
The company also announced Singer Capital Markets as sole corporate broker and financial adviser, while Shot Tower Capital LLC will conduct due diligence on the Hipgnosis Songs Fund's assets as part of a strategic review.
HSF has faced shareholder scrutiny recently. In October, two key votes on the firm's future, including a poll on its continuation, did not go its way. Roughly 83% of votes cast were against the company's continuation. In addition, Hipgnosis said around 84% of votes rejected a planned portfolio sale.
In September, it said it would be selling off 29 of its music catalogues for USD440 million to Hipgnosis Songs Capital, which is a partnership between HSF's investment adviser Hipgnosis Song Management and funds advised by New York-based alternative asset manager Blackstone.
The firm has also ruled out paying dividends any time soon, also putting pressure on the shares. In November, it said its investment adviser has been reviewing the firm's financial position. It discovered catalogue bonus provisions would be lofty.
"In light of this information, the board has determined that it will not declare dividends before the new financial year. The operating cash flow of the company during this time will therefore be used to ensure that the company has sufficient cash resources to fund the payment of the catalogue bonuses as required," HSF said in November.
Hipgnosis Songs Fund's shares were down 0.3% at 66.57 pence each in London on Monday morning. Shares have dropped some 30% since it announced plans for the USD440 million disposal.
By Hugh Cameron, Alliance News reporter
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