Fresh plan to save EMI from bank takeover

MUSIC company EMI has reportedly set its advisers to work on a bonus scheme to persuade investors to pump more funds into the group and avoid a takeover by its banker.

EMI is looking for a 120 million cash injection to stave off a takeover by Citigroup, which lent private equity firm Terra Firma 2.6 billion to fund its 4.2bn takeover of EMI in 2007.

Last week EMI abandoned a plan to bring in about 400m by selling the distribution rights to some of its North American back catalogue, which includes tracks by Blondie and The Beatles.

But it emerged over the weekend that rival Sony is now reportedly prepared to strike a deal over North and South American distribution rights to songs by British artists.

Former ITV boss Charles Allen, who is now executive chairman of EMI, is expected to present a fresh business plan to Terra Firma within the next fortnight.

It is believed that he will pledge further cost savings and improvements in profitability.

Investors in the two Terra Firma funds that own EMI would then be asked to stump up more cash to invest in the business.

EMI's other artists include Kylie Minogue, Norah Jones, Coldplay, Robbie WIlliams, Evanescence, Goldfrapp and Lily Allen.