LONDON — Troubled Canadian music retailer HMV Canada has been sold to British restructuring firm Hilco UK for $3.2 million, the company said Monday.

Hilco said it will also inject $25 million in working capital to fund the Canadian management team's plans to evolve the business.

The proceeds will go to HMV's British parent company, HMV Group PLC, which is struggling to pay down debt as the music industry moves from sales of physical CDs to downloadable digital files.

“We plan to immediately begin the next chapter in the growth of our business in the Canadian marketplace. We look forward to sharing more information regarding the future plans of HMV Canada in the coming weeks,” president of HMV Canada Nick Williams said in a statement.

The parent company has said it plans to move away from a traditional music retailer and begin adding other consumer electronics products, such as e-readers and tablets.

“The management team of HMV Canada has built a plan that will extend the period over which the residual hard-copy music and film market can be maintained,” said Hilco UK Chief Executive Paul McGowan.

“The new product categories it is introducing to the business will help sustain sales levels during the transition of entertainment sales into the digital realm.”

HMV Canada, which operates 121 stores across the country, said it plans to expand its current digital platform for consumers to include streamed content.

HMV Canada launched hmvdigital.ca in 2009 where customers can choose from 10 million downloadable MP3 tracks.

Hilco UK said it secured the support of all major Canadian suppliers for its plans to fund the business.

McGowan explained: “Our financial and merchandise planning teams will be assisting existing management to optimize the business. The support of the entire industry shows how important it is to extend the residual market, despite the switch to digital.”

For the year ended on April 24, 2010, HMV Canada generated sales of $360 million and an operating profit of $3.7 million, and operated with gross assets of $75 million.