Hipgnosis completes $23.1m sale of song portfolio, appoints new financial advisers
In a significant development, Hipgnosis Songs Fund Limited has successfully completed the sale of approximately 20,000 songs for a gross consideration of $23.1 million. This sale, announced on September 14, 2023, constitutes roughly 1% of the company’s investment portfolio by value.
These songs, identified as part of the Second Disposal in September, were initially acquired as part of Kobalt Fund One in 2020. They have been deemed non-core due to their demanding accounting and reporting requirements and their limited perpetual ownership rights. The sale aligns with Hipgnosis’ acquisition strategy, where divesting non-core assets is a tactical move.
The agreed sale price reflects a 14.2% discount to the valuation prepared by the company’s independent valuer as of September 30, 2023. This translates to a 9.6x Net Publisher Share multiple, with net proceeds expected to be around $22.6 million.
Hipgnosis Songs Fund Limited Announces Sale of Non-Core Assets and Strategic Adviser Appointments
Strategic Use of Sale Proceeds and Future Plans
The net proceeds from this sale are earmarked for reducing RCF (Revolving Credit Facility) drawings. This strategic financial decision will enhance the company’s compliance with future covenant reporting and provide increased financial flexibility.
Appointment of New Advisers for Strategic Review
Adding to its strategic developments, Hipgnosis is pleased to announce the appointment of Singer Capital Markets as its sole corporate broker and financial adviser. Additionally, Shot Tower Capital, LLC has been appointed as the lead adviser. These firms will play a pivotal role in conducting due diligence on Hipgnosis’ assets as part of an ongoing strategic review. This move indicates the company’s commitment to optimizing its portfolio and ensuring robust financial management.
In conclusion, Hipgnosis Songs Fund Limited’s recent actions – the sale of non-core assets and the appointment of new financial advisers – mark a proactive approach in managing its extensive song portfolio. This strategic maneuvering not only streamlines the company’s assets but also sets the stage for future growth and financial stability in the competitive music investment sector.