Sign in to follow this  
Followers 0
DJ Stashman

EMI taken over by Citigroup in deal to write off debts

12 posts in this topic

Citigroup has taken control of EMI in a dramatic move that saw the US bank write off £2.2bn of loans to the heavily indebted UK music group.

The move leaves Guy Hands’s buy-out house Terra Firma nursing losses of £1.75bn on his most high profile deal and raises big questions over his ability to raise another big institutional private equity fund.

Citi moved to take control of EMI earlier on Tuesday after a holding company for the music group breached an ongoing test of solvency triggered by the sheer weight of its £3.4bn debts.

Administrators at PWC were appointed on Tuesday morning after an emergency board meeting by the directors of Maltby Investments, the holding company that owns EMI. Maltby then sold to Citi through a pre-packaged administration which is the largest on record.

Following the takeover, Citi wrote down 65 per cent of the group’s £3.4bn of debts, leaving the company with more than £300m in cash on hand and £1.2bn of debt. It was done without EMI’s owner Terra Firma knowing about it, one of the people familiar with the situation said. Terra Firma declined to comment and Mr Hands could not be reached for comment.

Mr Hands last year lost a high-profile court case in the US against Citigroup, in which he alleged Citigroup that had tricked him into overpaying for EMI, after the jury found unanimously for the bank after a three-week trial. The Terra Firma boss is appealing that verdict.

The debt-for-equity swap by the bank is set to leave the music group in a much stronger financial position.

“The recapitalisation of EMI by Citi is an extremely positive step for the company,” Roger Faxon, EMI’s chief executive, 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. With that solid footing, we are confident in our ability to drive our business forward.”

The business was sold to Citi for an undisclosed amount with the use of a prepackaged administration to avoid any damage to the business that could have been caused by any of the group being in insolvency for any significant period of time. The EMI Group and its businesses, principally Music Publishing and Recorded Music, its employees, artists, songwriters, customers, suppliers and pensioners will not be directly affected by the administration of Maltby Investments.

“This transaction has enabled ownership of the EMI Group to transfer without any disruption,” said Peter Spratt, joint administrator and partner at PwC. “This represents the best outcome for the EMI Group, its employees, artists and suppliers.”

Despite expectations that such move would be a precursor to an immediate sale, Citi is not planning to rush a sale, which could take 12 months, according to a person familiar with the bank’s plans.

The bank indicated that it was happy with management and had no plans to interfere with the company, which will be held under Citigroup’s in-house private equity unit CGI.

In the last month, Warner Music has hired Goldman Sachs to run an auction of itself, raising the prospect that someone could bid for both EMI and its main US rival.

http://www.ft.com/cms/s/0/b5b0ed32-2e23-11e0-8733-00144feabdc0.html?ftcamp=rss#axzz1Cj8g8aZQ

0

Share this post


Link to post
Share on other sites

this is good to boost your "business acumen" if your applying to any of the mentioned companies for work.

0

Share this post


Link to post
Share on other sites

that lost debt court case f*cked up my work experience..

0

Share this post


Link to post
Share on other sites

Your student loan interest is now being used to pay for Katy Perry/ Tinie Tempah albums

0

Share this post


Link to post
Share on other sites

But how does a company get a 3bn debt? Surely you question your methods before you get to the first 1bn debt

0

Share this post


Link to post
Share on other sites

obv they borrow for running costs or projects where they dnt fully recoup or whatever

the turnover is obv stupid high u cnt be bringing in 50k a year n have 3bn in debt

theyre a f*ckin huge company

0

Share this post


Link to post
Share on other sites

not good at all

i really dont know what im doing or where to turn

info is scattered and i dont know what to do with it

imma ahve to start ordering books, but all the ones i see are like from the 90's or early noughties, dnt know if i need something current

tryna master spreadbetting before i move to anything else

0

Share this post


Link to post
Share on other sites

not good at all

i really dont know what im doing or where to turn

info is scattered and i dont know what to do with it

imma ahve to start ordering books, but all the ones i see are like from the 90's or early noughties, dnt know if i need something current

tryna master spreadbetting before i move to anything else

Alot of the old theories still hold weight today and are the bread and butter of economics albeit with minor tweaks esp after the financial crisis

But if you could bang these books and learn these old theories, then be able to understand them inside out and even develop upon them you would be some epic economist

Sometimes structured learning limits your capacity

0

Share this post


Link to post
Share on other sites

you got any recommendations for stuff i should check out?

im lookin to take like a year or sutin to learn this stuff

0

Share this post


Link to post
Share on other sites

master spreadbetting, wouldnt that be an oxymoron

lulz

0

Share this post


Link to post
Share on other sites

Surprised Warner didn't buy them out years ago

Looking increasingly unlikely given Bronfmans recent crimes

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now
Sign in to follow this  
Followers 0