The entertainment retailer also says it is considering selling its HMV Canada business.
In a statement to shareholders HMV says it is “exploring strategic options in respect of Waterstone’s and HMV Canada” but maintains that nothing has been decided and a sale may not go ahead.
It went on to reiterate that: “The Group’s lending banks continue to be supportive, our banking facilities remain fully available and the Group is continuing to maintain a regular and constructive dialogue with its lenders.”
Selling the bookstore chain is one option the retail group is considering in order to raise cash in return for a relaxation of its lending covenants to avoid breaching certain terms of its bank loan.
HMV has issued two profit warnings this year and expects to miss its target of £45m in full-year underlying pre-tax profits.
Other options HMV is thought to be considering to raise cash include further store closures, it is already planning to close 60 stores, or a share issue.
Tim Waterstone, the book chain’s founder has been cited as a possible bidder for the chain. As has Russian investor Alexander Mamut, who has increased his stake in HMV Group to 6% in the past three months.