HMV faces 12 critical days to avoid banking breach

Material Uncertanities

Analysts at brokerage Panmure Gordon said in a note: "It is difficult to ascribe an equity value (to HMV), given the material uncertainties.

The group has a lot of support from its various stakeholders, but its markets are extremely unhelpful."

HMV's statement came as the group reported a 24.1 million pound ($39 million) operating loss for the 26 weeks to Oct. 27, an improvement on the 33.2 million pound loss posted a year ago.

The group, which has benefited from better terms with its key suppliers and from rival computer games retailer Game hitting trouble and halving its number of stores, said like-for-like retail sales in music and DVDs still fell by 16 percent despite growing its market share in all categories.

Net debt at the half-year rose to 176.

1 million pounds from 163.7 million and HMV said it had begun a review of its cost base, although the closure of any of its 247 stores was not planned for the time being.

The firm has made a string of disposals to help reduce debt, selling its Waterstones's book chain last year for 53 million pounds.

This year it has sold much of its live entertainment business, disposing of a chunk including London venues such as the HMV Forum and the Jazz Cafe last week and the London Hammersmith Apollo in May.

The group is in talks to sell the G-A-Y and Heaven clubs - the remaining parts of its live business.

It said it would unveil new initiatives with its suppliers in January, but would not be drawn on specific plans.

HMV shares, which have slumped in value from a high of 282 pence set in February 2005, were down 37 percent at 2.67 pence at 0943 GMT, having hit a new low of 2.2p.

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