Hipgnosis: Embattled music fund announces sale of 20,000 more songs
Embattled music fund Hipgnosis continued its bid to turn its fortunes around, with today the sale of an additional 20,000 songs for £18.4m.
The sale represents one per cent of the music fund’s investment portfolio, consisting of “non-core” songs which “require time intensive, ongoing accounting and reporting obligations and do not all have perpetual ownership rights,” Hipgnosis said.
“The gross consideration reflects a 14.2 per cent discount to the valuation of the songs prepared by the Company’s Portfolio Independent Valuer as at 30 September 2023” the company said.
The net proceeds, which are expected to equal some $22.6m, will be used to pay RCF (revolving credit facility) drawings in an effort to give the music fund “greater headroom” under future covenant compliance reporting.
Hipgnosis had first considered whether to sell off some of its catalogue over the summer when investors called on the company to sell some of its holdings as the firm’s share price floundered.
The music fund’s share price has fallen around 20 per cent over the last year. As of 8 am this morning, shares were trading at around 67p.
The approach is used as a potential escape route for Hipgnosis, which has been grappling with obstacles in expanding its holdings due to the constricting effect of its declining share price on fundraising efforts.
As part of today’s announcement, the company also publicised the appointment of Singer Capital Markets as corporate broker and financial adviser, as well as Shot Tower Capital as lead adviser in conducting part of the music fund’s strategic review.