HMV is to sell Mama Group, its profitable 13-strong live music business, in an effort to cut its £160m debt burden.
The group has instructed Citigroup to find a buyer for the business, which it acquired for £60m in January last year.
HMV said that Mama Group, which includes venues such as London’s Jazz Cafe and the Hammersmith Apollo, saw a first-half operating profit of £3.4m, up from £1.5m a year ago.
The move to sell Mama Group came as HMV warned that poor trading “may cast significant doubt” on the retailer’s future. It reported pre-tax losses of almost £46m for the six months to the end of October.
Simon Fox, chief executive of HMV, said: “The option of selling the live business would enable us to deleverage HMV’s balance sheet and invest in the core business.”
He added: “We think it’s worth more than £60m now.”
