Embattled entertainment retailer HMV is thought to be close to securing a refinancing deal to ensure its future.

HMV chief executive Simon Fox is understood to have negotiated a two year deal worth about £210m with its lenders RBS and Lloyds.

HMV last month achieved a sale of its book chain Waterstone’s for £53m to help pay down its £170m debt.

It is also in talks to sell off its Canadian arm, which is expected to fetch just £5m.

The retailer has issued a string of profit warnings this year and warned that it was in danger of breaching its banking covenants.

HMV has been diversifying in the face of declining music sales, expanding into live music and also focusing on technology in its stores.