LONDON, Jan 22 (Reuters) - British entertainment retailerHMV's debt has been bought by Hilco, giving therestructuring specialist a big say in the fate of the92-year-old group which sought protection from creditors lastweek.
"Hilco UK confirms that it has acquired HMV's debt from thegroup's lenders. It has not bought the business itself," Hilcosaid on its website on Tuesday.
"Hilco believes there to be a viable underlying HMV businessand will now be working closely with Deloitte who, asadministrators, are reviewing the business to determine futureoptions."
HMV's business of selling CDs, DVDs and video games hasstruggled in declining markets and amid increasing competitionfrom supermarkets and online retailers such as Amazon.Com Inc.
Its move into administration on Jan. 14 put 4,100 jobs atrisk and dealt the latest blow to a retail sector which has seena string of household names such as Comet, JJB Sports, MFI, andWoolworths fall by the wayside.
Hilco, which bought HMV Canada in 2011 and salvaged Britishhomewares firm Habitat, bought the debt from Lloyds BankingGroup and Royal Bank of Scotland. HMV had 176million pounds ($279 million) of underlying net debt in October.
Lloyds and RBS declined to comment.
"Stores continue to trade and, at this time, we remainhopeful of securing a long-term future for HMV as a goingconcern," said Nick Edwards at Deloitte.
Deloitte has received over 50 expressions of interest inHMV, including from private equity firms. Video games sellerGame has said it was interested in some HMV stores.
Hilco had been widely regarded as a frontrunner to take fullcontrol of HMV due to its relationship with music labels andfilm studios through its Canadian business.
On Monday, it was appointed to help Deloitte run the200-stores business during the administration, a source said.
Lloyds (LLOY)
