Terra Firma Offers Huge Return For EMI Investment
May 4, 2010 at 2:35 PM (PT)
TERRA FIRMA CAPITAL PARTNERS LTD. head GUY HANDS is trying to make an offer investors can't refuse. BLOOMBERG reports that HAND is claiming that investors could earn up to a 58% rate of return if they provide cash needed to keep lenders from seizing control of EMI GROUP LTD.
That assertion, made in a presentation TERRA FIRMA sent its clients on APRIL 27th, includes the recovery of the original equity, which would essentially be worthless without the new investment. The "best-case scenario" predicts a successful exit of the fund’s investment by 2015.
The firm needs to corral support from 755 of the fund investors and inform CITIGROUP INC., EMI’s lender, by MAY 14th, according to the document.
EMI also cited its unsuccessful attempt to generate revenue from other major label groups via licensing and outsourcing transactions, although talks are continuing. "The majors indicated that no deal would be possible unless an equity cure for a longer period was achieved, given the perceived risks associated with the debt holder subsequently becoming the owner of the company," TERRA FIRMA said.
The document also notes that EMI will report earnings before interest, taxes, depreciation and amortization of 330 million pounds for the full-year through MARCH 31st, according to TERRA FIRMA. EMI may also sell its Japanese division and its EMI CHRISTIAN MUSIC GROUP.