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Terra Firma have to help EMI meet bank payment
By CMU Editorial | Published on Friday 29 May 2009
According to the Wall Street Journal equity firm Terra Firma have had to inject another £28 million into EMI to keep the music group afloat.
Well, more specifically to cover interest payments due to Citigroup, the bank who helped finance Terra Firma’s acquisition of the London-based major music firm. Given EMI’s debts to Citibank were created by Terra Firma bosses it seems only fair they should foot the bill for interest payments, but analysts say that the company’s chief Guy Hands and his top team at the equity outfit would have hoped for EMI to be paying its own bank bills by now.
As previously reported, the EMI purchase has put quite a strain on Terra Firma, because the board there, insiders say, expected to turn round the flagging major’s fortunes pretty quickly once in charge. Although the subsequent credit crunch hasn’t helped, some say their failure to do so was mainly caused by some quite substantial misunderstandings of how record companies operate.
Officially Terra Firma remain committed to their EMI ownership for the foreseeable future, but with long time EMI suitors Warner Music getting a better rating in the US investment community of late, some wonder whether the boss there, Edgar Bronfman Jr, hasn’t got “buy EMI” back on his agenda. If he did make any moves in that direction, and if Terra Firma were open to the suggestion they offload their big music asset, it would be interesting to see if Bronfman’s controversial deal with the European indie label community, which was designed to help him get European Commission approval for a combined EMI Warner, still stands.
