Citigroup has acquired EMI Group and has recapitalized the major label group in a debt-for-equity swap, the two sides announced Tuesday.
As a result, the company’s debt has been reduced by 65% from £3.4 billion to £1.2 billion, and the company has in excess of £300 million of cash available, EMI said in a press release.
Following the appointment of Peter Spratt and Tony Lomas of PwC as administrators to Maltby Investments Limited, the administrators sold EMI and its immediate holding company Maltby Acquisitions Limited to Citi. Immediately following the transfer in ownership, Citi effected a debt-for-equity swap to recapitalize EMI, the press release continues. The EMI Group continues under the same management and is now separate from MIL, which remains in administration…
No music major now remains in British hands following the sale of EMI to US bank Citigroup.
The move immediately opened questions about a possible sell off of parts or the whole of the company.
Following the acquisition of the debt-laden major, which had been widely expected to take place later this year, Citi announced a recapitalisation of the company. As a result, the company’s debt has been reduced by 65% from £3.4bn to £1.2bn and the company now has in excess of £300m in cash available.
Citi said the new capital structure provided EMI with the financial strength and flexibility to deliver on its strategy to maximise value for its artists and songwriters.
EMI CEO Roger Faxon said this is “an extremely positive step for the company”…
The US bank took 100% ownership and immediately wrote-off £2.2bn from its borrowings – ending an acrimonious battle with Hands who had been fighting to retain control of the debt-laden music major.
EMI owes Citigroup more than £3bn. The bank supplied Hands with the debt to fund his £4.2bn acquisition of EMI in 2007, in what was seen as one of the most ambitious leveraged buyouts before the financial markets collapsed.
Under Hands, EMI initially struggled to retain marquee artists – losing both the Rolling Stones and Sir Paul McCartney – while senior executives came and went rapidly. Both Elio Leoni-Sceti and Charles Allen briefly ran its recorded music division – before turning over control to long-time insider Roger Faxon…