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Hipgnosis Songs Fund has slashed the value of its music portfolio by more than a quarter and said it would need to use free cash to pay down debt, in the latest blow to investors in the UK-listed music rights investment company.
The company’s board, which was revamped last year to oversee a strategic review that could lead to the sale of the group, had asked a new adviser to value a music rights portfolio that includes music by artists including Red Hot Chili Peppers and Rihanna.
Shot Tower, which carried out the new work, estimates a midpoint value of the portfolio of $1.9bn, or a reduction of 26.3 per cent to the valuation at September 30 2023.
Because of the cut to the net asset value, the board said it would need to reduce debt using the company’s free cash flow. It said it did not intend to restart paying dividends “for the foreseeable future”.
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