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(Alliance News) - Hipgnosis Songs Fund Ltd, which was due to release its half-year results on Tuesday, announced they will be delayed until the end of the year, amid a discrepancies between an independent valuation of its intellectual property assets and its manager's own view.
The embattled investor in music rights said an independent valuer found its assets have a value "materially higher than the valuation implied by proposed and recent transactions in the sector", particularly the proposed sale of assets to Hipgnosis Songs Capital, a joint venture between between investment adviser Hipgnosis Song Management Ltd and private equity firm Blackstone Inc.
The sale of assets to Hipgnosis Songs Capital for a net USD417.5 million reflected a 24% discount to the carried value of the assets as of March 31, the fund's financial year-end, while another recent sale of non-core assets for USD23.1 million was at a 14% discount to their valuation on September 30, the end of its first half.
After receiving the higher valuation from the independent valuer, the fund "sought advice" from its adviser on its opinion on the independent valuer's valuation. "Hipgnosis Song Management Ltd eventually provided an opinion, which was heavily caveated, such that the board has concerns as to the valuation of the company's assets in its interim results," Hipgnosis Songs Fund said.
The discounted sale of assets to a partnership that includes its investment adviser, followed in October by a profit warning and decision to skip paying a dividend, triggered a shareholder revolt. In November, the fund brought in Rob Naylor, a former director at peer Round Hill Music Royalty Fund Ltd, as its new chair.
Hipgnosis Songs Fund on Tuesday said it expects the publish the interim results before the end of the year.
Its shares were down 0.3% at 68.90 pence early Tuesday in London, having earlier fallen to 66.80p. They are down 19% in the past year.
By Tom Waite, Alliance News editor
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