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HMV aims to cut debts by 50% after new deal with suppliers

HMV store

HMV and its banks have today agreed a new deal with its suppliers in an effort to reduce the company's debts.

The deal aims to see HMV cut 50% off its debts over a period of three years.

In return, the deal sees suppliers get a 2.5% of shares in HMV.

Last month HMV reported poor sales over the Christmas period, despite opening a new 'Techshop' specialising in gadgets and technology.

HMV's chief executive, Simon Fox, welcomed the new deal with the banks and suppliers: "These developments represent a material improvement in our financial position relative to the statement we made at the time of our interim results."

The City responded positively to the news with shares in HMV up 100% in a matter of minutes.

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