LONDON (Reuters) – British private equity firm Terra Firma has asked Citigroup (C.N) to inject up to 300 million pounds ($486.1 million) into its debt-laden music group EMI, according to a report in the Sunday Times newspaper.
The buyout group led by Guy Hands, who is also chairman of EMI, has proposed an injection of between 250 million pounds and 300 million and has requested Citigroup write off about 500 million pounds of the debt from the label’s more troubled recorded music division, the paper said.
It said Hands had told Citigroup his proposal is a long-term solution for EMI, whose acts include Kylie Minogue and Robbie Williams, and would put the company on a firmer financial footing as well as giving Citi a better chance of syndicating the debt, which Terra Firma does not need to pay back until 2015.
No-one at Terra Firma or Citi could immediately be reached for comment.
Citi was left holding the entire debt package associated with Terra Firma’s 4 billion pounds takeover in September 2007, after an attempt to sell some of it to secondary investors was hit by the credit crunch.
EMI’s music publishing unit has performed well over the last year but its recorded music business has suffered and is where Hands wants the debt reduction to take place.
Terra Firma put 28 million pounds into EMI in May, its second injection of capital in six months, to keep the company within the terms of its debt agreements.
(Reporting by Rhys Jones; Editing by David Holmes)