Hipgnosis Songs Fund Limited (LSE:SONG) has completed the sale of a music catalogue for $23.1 million.
The London-based based music intellectual property rights investor has sold around 20,000 songs, around 1% of its investment portfolio.
The firm said these non-core songs were bundled with the iconic Songs acquired in 2020 as part of Kobalt Fund One.
Hipgnosis said the gross consideration reflects a 14.2% discount to the valuation of the songs prepared by the company's portfolio independent valuer at September 30 and represents a 9.6x net publisher share multiple.
Net proceeds are expected to equal around $22.6 million and will be used to pay down revolving credit facility drawings, providing the company with greater headroom under its future covenant compliance reporting.
The firm also named Singer Capital Markets as sole corporate broker and financial adviser and Shot Tower Capital, LLC as lead adviser to conduct due diligence on the company's assets as part of its strategic review.
In November, Hipgnosis warned it would not pay a dividend after reviewing the firm's financial position.
It said it expected catalogue bonus provisions to increase by roughly $23 million to $68 million at September 30 and predicted that only 10 out of the firm's 146 catalogues will meet "performance hurdles".