Published Feb 01, 2011We've been following the decline of EMI Music for some time, as the struggling label has been faced with mounting losses and even considered selling the iconic Abbey Road studios. It doesn't come as much of a surprise, then, that the Citigroup bank has now seized 100-percent control of the company.
This ends Guy Hands's three-and-a-half-year ownership of the label. He and his company, Terra Firma, purchased EMI back in August 2007 for £4 billion ($6.43 billion). Since then, the label has been unable to break even. Around this time last year, we received word that Terra Firma was seeking almost $170 million in order to keep EMI afloat.
According to Bloomberg, this new agreement will cut EMI's debt by 65 percent, bringing it down to a comparatively modest £1.2 billion ($1.93 billion). This debt-for-equity swap means that, for the time being at least, EMI is in slightly less dire financial straits.
This will likely pave the way for EMI to be bought out by another label. According to Bloomberg, Warner and BMG are among the companies that may make an offer.
Hands and Terra Firma previously sued Citigroup over the EMI deal, claiming in 2009 that the bank had fraudulently inflated the price of the label.