Report: Bankers Call New Tune Over EMI Finances
May 19, 2008 at 5:24 AM (PT)
The private equity firm run by financier GUY HANDS is fighting to meet financial targets set by CITIGROUP in a bid to avoid a fractious showdown with the bank that lent it £2.5bn to fund the EMI buyout, reports U.K.'s TELEGRAPH. HANDS' TERRA FIRMA CAPITAL PARTNERS originally signed up to tough financial targets for the year to JUNE, but THE SUNDAY TELEGRAPH reveals it has re-negotiated some of the terms to give itself three extra months to turn EMI around.
Managers have now been told that EMI's under-pressure recorded music division, must generate underlying earnings of £180m by SEPTEMBER to meet key targets set by CITIGROUP.
HANDS was able to buy time after raising £250m in JANUARY from outside investors who now have direct holdings in EMI. The new money will help finance a restructuring which is expected to add £100m to the bottom line by cutting over 2000 staff from its 5,500.