HMV to sell Canadian stores to Hilco UK

Struggling British retailer HMV is set to announce the sale of its 125-store Canadian business to restructuring specialist Hilco's Valco Capital Partners arm, the Sunday Telegraph reported.

An HMV spokeswoman declined to comment on the report while officials at Hilco UK could not be reached for comment.

The Sunday Telegraph reported the Canadian sale was expected to bring in some £5-million ($8.1 million) for HMV, which has issued four profit warnings this year.

Although a relatively small transaction, the sale would show further progress in HMV's restructuring and debt-cutting plans.

This month, HMV secured a £220-million refinancing deal that would effectively involve the British taxpayer taking a stake in the group.

In May, HMV sold its Waterstone's book chain to Russian billionaire Alexander Mamut, pledging to use the £53-million proceeds to cut £170-million of debt.