EMI Facing Default On Citigroup Payments
April 1, 2010 at 4:27 AM (PT)
Things are looking grim at EMI, as the company faces being taken over by its bankers after failing to work out a deal to sell its NORTH AMERICAN distribution rights for its artists to UNIVERSAL MUSIC GROUP or SONY MUSIC, reports THE ASSOCIATED PRESS.
EMI reportedly needed to raise around $304 million (200 million pounds) to keep its creditors at bay. "A source close to both sets of talks, who requested anonymity because the discussions were private, said THURSDAY that they fell apart after a failure to agree on price," writes THE AP. "That leaves EMI, owned by private equity group TERRA FIRMA CAPITAL PARTNERS LTD., battling to raise 120 million pounds by mid-JUNE to meet its commitments on loans from U.S. bank CITIGROUP."
YESTERDAY (NET NEWS 3/31) UMG walked away from talks with EMI.
THE NEW YORK POST writes, "The next few months are crucial. TERRA FIRMA needs to come up with about $160 million by a JUNE deadline to prevent EMI from defaulting. If it fails, lender CITIGROUP may take control of the label, possibly breaking it up or selling it off.
"The pressure is now on new EMI boss CHARLES ALLEN to formulate a business plan that [CEO GUY] HANDS can use to persuade investors in the next few months to sink more money into the company -- a plan that will face plenty of skeptics. "