The Hipgnosis Song fund has sold 20,000 songs from its portfolio for a total of $23.1m (£18.41m).
The sale, of what Hipgnosis calls ‘non-core songs’, amounts to 1% of the value of the portfolio. Although the company said the eventual sale was part of its acquisition strategy, the assets were sold at a 14.2% discount compared to the valuation at the end of September.
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The company plans to use the $22.6m in net proceeds to “pay down RCF drawings, providing the Company with greater headroom under its future covenant compliance reporting”.
The songs being sold were part of an acquisition in 2020 of Kobalt Fund One, in a bundle with what the company calls “iconic Songs”. Hipgnosis said the ‘non-core songs’ “require time intensive, ongoing accounting and reporting obligations and do not all have perpetual ownership rights”.
Hipgnosis is set to announce its fiscal half-year results on 19 December, following a tumultuous period for the business.
In October, shareholders rejected the sale of part of the portfolio for £440m and 83.2% of investors voted against its continuation. The vote triggered a six-month period for the trust’s board to propose ideas for reconstruction or reorganisation.
Hipgnosis also announced Singer Capital Markets as the corporate broker and as financial adviser for the company moving forward. Shot Tower Capital was chosen as the lead adviser, where it will “conduct due diligence on the company’s assets as part of its strategic review”.
