Terra Firma Lessens EMI Oversight After Citigroup Refuses Debt Deal
November 16, 2009 at 2:48 PM (PT)
Soon after CITIGROUP rejected a proposal to refinance EMI's debt, TERRA FIRMA has pulled 10 of its executives out of the day-to-day operations of the music publishing firm. The private equity house, run by GUY HANDS, has written its investment in EMI down by 90% as it offers to put another £1bn ($1.7bn) into the struggling music group to restructure its debt.
Sources told the WALL STREET JOURNAL that TERRA FIRMA had offered to put up approximately GBP1 billion (EUR1.1 billion) of equity into the company in exchange for CITIGROUP forgiving a similar proportion of the GBP2.6 billion of debt it held. Those terms weren't good enough for CITIGROUP..
"CITI is not unwilling to restructure," one source said. "It is an argument over where value breaks and what a fair deal is."
EMI's own executives are expected to assume the operations of the company by MARCH, although appointed board members PAT O'DRISCOLL, former CEO of NORTHERN FOODS, and LORD BIRT, former Dir. General of the BBC, will stay on.
Here's the FINANCIAL TIMES' take on the situation.