Struggling retailer HMV said in a trading update today that it had agreed an amendment to its banking covenants ahead of a wider refinancing with its lenders.
The company said it had agreed to push back the date at which its loan covenants are tested.
“Since the group’s last update on 1 March trading conditions have remained difficult,” HMV said, “and with four weeks of the group’s financial year to go, the board now expects profit before tax and exceptional items for the full year to be around £30m.
“At the time of the last trading update, the group reported that it had commenced discussions with its lenders ahead of publication of its full year results regarding potential changes to the facility agreement, which would ensure their appropriateness for future trading conditions and to support delivery of the group’s strategy.
“While negotiations regarding amended facilities continue, the group is pleased to report that its lenders have agreed to move the measurement period for all relevant financial covenant tests from the 12 months ending 30 April 2011 to the 12 months ending 2 July 2011. The group’s banking facilities remain fully available, the group’s lenders continue to be supportive and the group is maintaining a regular and constructive dialogue with them.”
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