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New York Post says Terra Firma backers ready to bail on EMI
By CMU Editorial | Published on Friday 10 December 2010
So, the New York Post reckons that Terra Firma’s financial backers will not stump up the hundred million or so EMI is likely to need to stick to its loan covenants with Citigroup next spring, leading to new speculation that the US bank will take ownership of the music company at some point next year and most likely sell it off.
Of course, the exact same rumours circulated this time last year and Terra Firma chief Guy Hands managed, in the end, by one means or another, to raise the cash and obtain permission from his backers to hand it over to EMI, thus ensuring the music major stayed within the terms of its multi-billion bank loan.
But a year on, and with EMI still relying on its parent company for financial assistance (albeit mainly with regards the stupidly severe terms of the debt said parent company saddled it with), and with the embarrassment of Terra Firma’s unsuccessful litigation against Citigroup over its EMI acquisition still very much on their minds, the Post reckons the equity group’s investors are now even less likely to support Hands on this one.
And, of course, since that court case it seems unlikely that Citigroup – already resistant to helping Terra Firma out – will agree to any restructuring of EMI’s debts, nor give approval to any big asset sell offs in order to raise the hundred million.
Since that court case senior insiders at both Terra Firma and EMI have insisted the equity group remains committed to the music company in the short term, though, ultimately, it’s the former’s backers who are in control here. How reliable the Post’s sources are we don’t know, but what is certain is that 2011 is going to be another year of uncertainty for the UK’s major music company.
