UK entertainment media retailer HMV has been offered a lifeline by its banking syndicate which will hopefully allow the group to continue trading, with the plan being to cut debts by 50 per cent in three years.
The new agreement centres on waiving a covenant test which had been scheduled for this month and reassessing the finances for the two twelve month periods ending in April and July.
In a public statement, HMV revealed that it had also renegotiated with it film and music suppliers, offering warrants representing 2.5 per cent of its equity to the companies.
"Today's announcement is enormously welcome. These developments represent a material improvement in our financial position relative to the statement we made at the time of our Interim results," said chief executive Simon Fox.
"The new relationship with our suppliers and the support of our banks will now enable HMV to wholeheartedly focus all of its energies - working in close partnership with its suppliers, on serving the changing needs of its customers ever more effectively. As a key part of this we remain committed to improving our specialist ranging and merchandising of music and DVD whilst also continuing to grow our sales in portable technology and further developing our online and digital offers."
The three-year plan to halve debt doesn't include the potential selling off of HMV's 'Live' assets, which operate a number of music venues and concerts around the country.
HMV has built strong ties as a retailer within the games industry by running midnight launches for titles such as Modern Warfare.