Japanese group buys into HMV Asia

Hong Kong-based private-equity firm Aid Partners is about to sell a parcel of its HMV Asia shares, which it acquired three years ago.

It has agreed to sell an 18.37 per cent stake in the business to Japan’s World Innovation Lab for US$9 million. Under the agreement, 2250 new ordinary shares in the capital of the HMV Group’s interests in Hong Kong and Singapore, run by HMV Marketing, will change hands.

A stock exchange filing says the proceeds from the stake sale will be used for the general working capital of the HMV Group. World Innovation Lab, which specialises in investment including the technology and media sectors, will help in the strategic development and promotion of the movie and music retailer with its international network and business experience.

Aid Partners is selling the shares to WiL Fund I, an investment fund managed by World Innovation Lab. The Hong Kong firm will still own 81.63 per cent of the business.

Once the deal goes through, Innovation Lab will have a director on the board of HMV.
Aid Partners bought HMV’s interests in Hong Kong and Singapore in 2013, along with all its licences in mainland China, Macau and Taiwan for an undisclosed amount.

HMV then had six stores in Hong Kong and two in Singapore, plus an eCommerce business in Hong Kong. Aid Partners cut back the music and movie retail stores to five, and opened two restaurants and a cafe under the HMV brand.

The Asian business is a separate entity from HMV in the UK, which went into administration the month before Aid acquired the Asian business.

As at June 30, the unaudited net liabilities of HMV Marketing were about HK$39,512,000 (US$5,085,167).