14th Sep 2023 09:28
(Alliance News) - Hipgnosis Songs Fund Ltd on Thursday said it is selling off 29 of its music catalogues to help fund a share buyback programme and reduce its debt.
Hipgnosis Songs Fund said it is selling off 29 of its catalogues to Hipgnosis Songs Capital, which is a partnership between HSF's investment adviser Hipgnosis Song Management Ltd and funds advised by New York-based alternative asset manager Blackstone Inc.
The proposals are designed to re-rate its share price and narrow the discount to operative net asset value, which HSF said is currently 40%.
The stock was up 1.4% to 94.34 pence each in London early Thursday. Over the last 12 months, the stock is down 8.4%.
"The board and the investment adviser believe that, over the last 18 months, the company's share price has not reflected the fundamental value of the company," HSF said.
The music intellectual property rights investor will sell the catalogues for USD440 million in cash, and some non-core songs for around USD25 million.
It will then buy back up to USD180 million of its own shares, and repay USD250 million of its drawings under its revolving credit facility.
"These disposals are of the smallest magnitude possible that would provide the required capital to execute on this strategy, whilst ensuring that the ongoing investment case for Hipgnosis Songs Fund remains intact by protecting the strength of the remaining portfolio," HSF said.
The proposals are subject to shareholder approval. HSF plans to hold an extraordinary general meeting and its 2023 annual general meeting by no later than October 25.
By Sophie Rose, Alliance News reporter
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