There are 296 Waterstone’s stores HMV has agreed to sell its Waterstone’s book chain to a fund controlled by Russian billionaire Alexander Mamut for £53m.
Mr Mamut already owns 6% of HMV, which has issued a string of profits warnings this year.
The sale to A&NN Capital Fund Management still needs shareholder approval, but HMV said the deal should be finalised by the end of June.
Mr Mamut has been linked with a deal to buy Waterstone’s for a number of weeks.
HMV announced in March that it was exploring options to sell the business.
The troubled retailer has been struggling to cope with declining sales in the face of increasingly fierce competition from supermarkets and online retailers such as Amazon and iTunes.
It announced on Friday that like-for-like sales, which strip out the impact of sales from stores open less than a year, for the 12 months to the end of April slumped by 13.7%. Like-for-like sales at Waterstone’s fell by 3.8% over the same period.
It has estimated debts of £130m and is under pressure from its bankers to raise cash. Only last month it said it expected annual profits to be about 25% lower than it had hoped.
HMV said it had little choice but to sell the book chain.
HMV has been struggling in the face of increased competition from supermarkets and online retailers “It has become clear that the group needs to reduce its borrowing requirements in the short term in order to achieve a satisfactory refinancing,” the company said in a statement.
“The board has concluded that the most timely and effective way to achieve this is through the disposal of Waterstone’s.”
Simon Fox, chief executive of HMV Group, said the sale to Mr Mamut “provides a good new home for the business”.
Mr Mamut said he was “extremely pleased to have reached an agreement to acquire Waterstone’s and its great heritage”.
“I believe our investment and strategy will secure a dynamic future for the UK’s largest bookshop chain.”
In the UK and Ireland, the group owns about 285 HMV stores, but is in process of closing 60 of these as part of its cost-cutting plans.
It owns 296 Waterstone’s bookstores, employing about 4,500 people.
The group’s international business comprises 125 stores in Canada, five in Hong Kong and two in Singapore.
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