LONDON (CelebrityAccess) — The Board of Hipgnosis Songs Fund Limited warned investors that dividends for the quarter will be negatively impacted following the U.S. Copyright Royalty’s boards CRB Ruling on retroactive royalty payments.
According to Hipgnosis, Citrin Cooperman, the company’s independent portfolio evaluator, warned Hipgnosis that they would receive significantly lower retroactive payments as a result of the ruling.
Consequently, Hipgnosis’ board withdrew their proposed interim dividend of 1.3125 pence per share announced on 21 September 2023 to avoid impinging on its covenants with creditors.
In addition, the Hipgnosis is in discussion with its lenders to avoid any potential impacts of the unwinding of the CRB III accrual on future Fixed Charge Cover Ratio covenant compliance.
Hipgnosis had expected to accrue $21.7 million from streaming following the Copyright Review Board’s retroactive streaming rates ruling, but will now only realize $9.9m, the company said.
While Hipgnosis has postponed its current dividend disbursement, the company said that after concluding ongoing discussions with lenders, they expected to pay future dividends as planned.
