In an announcement expected to be made tomorrow, the trouble high-street music chain HMV is set to become owned by the general public. More specifically, banks such has the Lloyds Banking Group which are majority owned by the general public will now take a stake in HMV in a bid to help with restructuring it’s debt.

With the announcement tomorrow, it’s expected that the sale of Waterstones book chain will go through, raising £53 million towards HMV’s debt fund.

HMV has debts of £170 million. Banks will take a 5% stake in the company, based on a warrant. In a years time these warrants will be converted into shares. The deal with the banks come with high interest rates and fees. 

This is yet another sign that a once dominant high-street is struggling under the pressure of debt, low consumer confidence and the rise of internet shopping, which HMV missed the boat on when iTunes was launched.

Personally, I don’t think HMV will be long for this world. Their CD’s are too expensive compared to downloadable albums. Their points rewards system doesn’t proportionately reflect the amount of money you spend, you get 1 point per penny spent, but to get a £20 voucher, you have to spend 50,000 points (£500), and that’s no way near value for money.