EMI owner pledges £105m boost to fend off Citigroup

THE owner of music group EMI yesterday pledged to inject more money into the business in order to prevent US bank Citigroup from taking control.

Financier Guy Hands' private equity fund Terra Firma has secured sufficient support from investors for the fundraising, which reportedly involves a sum of about 105 million.

Hands had until yesterday to give Citigroup a compliance certificate showing that EMI can avoid breaching the terms of its 3.2 billion loans for another year. Failure to have done so would have seen its recorded music arm default on its debt, allowing Citigroup to take control or sell it on to a rival.

EMI – whose acts include Gorillaz and Coldplay – said the funding commitment represented a vote of confidence in its turnaround plans.

The firm said it expected the process to be completed by a deadline of 14 June.

The 105m being raised is well short of the 360m Hands originally wanted to tide the group over until 2015, and he will still have to go back to investors to ask for an additional 255m later in the year or secure the funding from other sources.

Terra Firma bought EMI for 4.2bn in 2007, borrowing 3.2bn from Citigroup to fund the deal.