Hilco UK acquires HMV's £176m debt, giving it control of the retailer and reigniting prospects of the store's survival, as HMV gift vouchers are now being accepted again.

HMV's administrators have bowed to public pressure and will accept gift cards and vouchers at the collapsed music chain.

The retail restructuring group and owner of HMV Canada is understood to have bought the debt from HMV's lenders, the Royal Bank of Scotland and Lloyds.

HMV's net debt last October stood at £176m. The deal means Hilco does not yet officially own HMV but can effectively take control of the retailer and work with Deloitte in deciding its future.

Hilco was widely tipped as a favourite to bail out HMV as it owns the retailer's Canadian chain. Last night Deloitte announced customers would be able to redeem gift vouchers in a move that also ignited hope for its survival.

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U-turn over voucher redemption

Administrator Nick Edwards said that the voucher U-turn was made after assessing HMV's financial position. He added: "We recognise that both of these matters have caused concern for individuals and organisations affected, and we are pleased to have reached a positive outcome."

Controversy had surrounded the administrators' decision to ban redemptions of vouchers when Deloitte was appointed on 14 January, despite the fact that they had been on sale until hours before the chain's collapse.

However, Deloitte said on Monday that gift cards and vouchers would be redeemable in stores from Tuesday. He added: "We recognise that both of these matters have caused concern for individuals and organisations affected, and we are pleased to have reached a positive outcome."

The company hit a wall last week after suffering dismal Christmas sales, putting more than 4,000 jobs at risk at its 223 stores.