Hipgnosis Songs Fund has announced that it will be delaying dividend payments following a report that reveals a decrease in the value of the company’s assets compared to previous estimations.
Strategic Financial Decision
The London-listed song catalog fund has decided to prioritize reducing its gearing and using free cash flow to pay off debt instead of immediately resuming dividend payments to shareholders.
Independent Valuation Report
Adviser Shot Tower Capital conducted a preliminary valuation as part of a strategic review, estimating the fair market value of the company’s portfolio as of March 1. The valuation ranged between $1.80 billion and $2.06 billion, with an adjusted value after deducting contingent catalogue bonuses.
The new valuation reflects a significant reduction compared to the previous fair value as of September 30, leading to a decrease in the operative net asset value.
Strategic Focus on Shareholder Value
Chairman Robert Naylor acknowledged the material difference in valuations and emphasized the Board’s commitment to exploring all options to deliver shareholder value.
Hipgnosis Songs Fund, known for owning rights to popular tracks by artists such as Shakira and the Red Hot Chili Peppers, will continue to prioritize financial stability and growth moving forward.