London – Major record label EMI announced on Tuesday that it
has been acquired by Citigroup, which in turn announced a recapitalization of
the company that will reduce its debt by 65%, and provide over $484 million in
financing. "[The deal] 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," said EMI chief executive Roger Faxon.
Citigroup helped finance
private equity firm Terra Firma’s $4.7 billion acquisition of EMI in 2007.
Since then, Terra Firma has had to seek additional financing numerous times in
order to meet loan repayments on that deal, but has now defaulted and
Citigroup has taken over.
Citigroup did not announce any intention to sell off
all or parts of EMI, as many have speculated it would, should events unfold as
A Citigroup insider told Music Week the bank "has already been
in talks with all the relevant majors about selling off the various parts of
(DMW previous coverage)