Citigroup Takes Over EMI

Citigroup has reportedly seized control of EMI following a restructuring deal with private equity firm Terra Firma, which paid £4.2 billion for the British record label in 2007 with the help of Citigroup financing.

In the restructuring deal, the banking giant immediately wrote off £2.2 billion of Terra Firma’s debt and reclaimed 100 percent of its share capital.

EMI had warned for months that it might not be able to meet its banking covenants.

The music company’s management remains unchanged, with Roger Faxon as CEO.

“The recapitalization of EMI by Citi is an extremely positive step for the company, “ Faxon said in a statement. “It has given us one of the most robust balance sheets in the industry with a modest level of debt and substantial liquidity.”

It is presumed Citigroup will continue in its search for a buyer for EMI, with Warner Music Group among the most frequently mentioned potential suitors.