:dance:, maybe?

I bet they do have a lot of options......I mean c'mon their Coldplay they sell millions of records so i bet they have all of the biggest companies trying to convince them to sign with their labels!

Hopefully they'll leave as soon as they can and do everything "in-house"!!

Terra Firma writes off half of EMI buy

 

Terra Firma, the buy-out house run by financier Guy Hands, has written off half its €2.6bn (£2.3bn) investment in EMI, the music group, accepting the likelihood of losses on one of the most eye-catching deals struck during the credit bubble.

 

EMI accounted for the lion’s share of a €1.37bn impairment charge in Terra Firma’s annual review, which it published on Monday. It contributed to a writedown of 45.5 per cent on the buy-out house’s entire portfolio.

 

The move came as private equity groups across the world, including Kohlberg Kravis Roberts, Candover and Blackstone, are slashing the paper value of their investments to reflect financial and economic difficulties.

 

The impairment on EMI shows that Mr Hands has accepted there is little chance of recovering all his €2.6bn equity investment in the music group.

 

Terra Firma said its directors decided it was “prudent” to take an impairment, which unlike a writedown must be recorded in the profit and loss statement, even though it will receive slightly lower fees as a result.

 

The buy-out house said the drop in the pound against the euro had hurt the valuation of its portfolio, which fell from €7.79bn to €4.49bn last year.

 

It said earnings before interest, tax, depreciation and amortisation grew by 11 per cent on average across its portfolio, mainly due to strong growth at EMI, which more than doubled earnings to £195m in the last nine months of 2008.

 

KKR on Monday reported a 47.5 per cent writedown in the value of investments by its Amsterdam-listed vehicle for 2008.

 

Candover wrote down a third of its investments to zero, including Gala Coral, the biggest UK bingo and betting group.

 

Blackstone last week wrote down its private equity portfolio by 29 per cent.

 

http://www.ft.com/cms/s/0/da4f5676-0768-11de-9294-000077b07658.html?nclick_check=1

Owned.

Ha-ha, that would teach mr Hands a lesson.

EMI has a new spin on record market

 

Coldplay's Chris Martin with EMI's Leoni-Sceti

 

New chief Elio Leoni-Sceti is devising a fresh business model

 

Elio Leoni-Sceti’s four children look at him quizzically when he talks about records. The chief executive of EMI Music is constantly reminded that his industry has been transformed since he was a youngster in Rome listening to The Beatles.

 

“Record is a word that does not exist in the vocabulary of a 15-year old,” said Leoni-Sceti.

 

It has taken the music industry a while to catch up with changing consumer behaviour. EMI has taken longer than most. The decline of the old album model and the rise of the iPod culture hastened its takeover by Guy Hands’s Terra Firma in 2007. Last week Hands wrote off half the £2.3 billion he invested, accepting that he is likely to make a loss on the deal.

 

Still, Leoni-Sceti, used to selling Cillit Bang stain remover and Airwick air freshener during his 16 years at Reckitt Benckiser, believes he is reconfiguring EMI for the MySpace generation and this involves more than chasing after illegal downloaders.

 

“As an industry, we lost touch with consumer behaviour,” he said. “Because we didn’t understanding it, we didn’t have the right product at the place and time where they intend to buy it.” Leoni-Sceti’s job is it to reconnect both sides and make a profit out of his products along the way.

 

This means more work for artists. All but the biggest bands such as Coldplay will have to rethink the tradition of producing a 12-track album every second year. “Kids have an attention span that lasts a split-second,” said Leoni-Sceti. “As an act, if you do not keep that relationship going on a weekly basis you lose a bunch of them, who go somewhere else and forget about you.”

 

He cited the example of Lady Antebellum, a band with its roots in country music that posts a weekly “webisode” of its activities on its site. “If we could add to this a track a month, that would be absolutely great. We are moving that way but we are not there yet. Continuity in the relationship needs to be developed.”

 

Terra Firma has stripped £200m from EMI’s £700m cost base, including the loss of 2,000 jobs. Leoni-Sceti must reinvent what is left as a marketing machine that can distribute music far and wide, and not just for its own artists.

 

EMI has just struck a deal on behalf of the Brighton Port Authority — DJ Norman Cook’s latest project — to use his music in a Ford commercial, the first time EMI has done so without owning the master tapes. Damon Albarn of Blur is also allowing his work to be used in an environmental campaign by British Gas.

 

Linking brands with music through advertising might sound like a turn-off for bands, but Leoni-Sceti believes that done in the right way it is a big opportunity. “If there is great music and a great message, their association reinforces each other rather than weakening each other.”

 

The company has a 50-strong music-services team dedicated to finding new income streams. It aims to tap into the growing popularity of live events by better merchandising or selling a recording of a concert to the audience as they file out of the venue.

 

That is all very well when labels are signing up-and-coming artists, but the industry cannot achieve success in new areas without established artists signing contracts that are quite different from the old three-album deals.

 

http://business.timesonline.co.uk/tol/business/industry_sectors/media/article5864044.ece

so does this mean hands has less/no more influence? :thinking: that guy gives me the heebie-jeebies.

 

and i still hope coldplay leaves and goes independent, pulls a radiohead. some of their business practices could use some tweaking, if you ask me, and i think they'd be more able to tweak them if they weren't on a major label.

Well I believe they only have one record left in their contract and a greatest hits. The fact that they are already saying they want to release the last album before the end of 2009 seems like maybe they are wanting to either shop around or go independent. I mean it will only be a year and a half since VLVODAAHF was released... I think that will be shortest time between two albums for them: Parachutes to AROBTTH: about 2 yrs, AROBTTH to X&Y: about 3 yrs, X&Y to VLVODAAHF: about 3 yrs...

The new business model, Cobalt DOES NOT WANT.

 

A track a month is too hard for some :sick:

I agree, I hate the way music is distributed at the moment. Gone are the good old days when people would queue up for albums on their day of release. Gone are the days when B-Sides were used on more-valuable singles in Physical form.

 

And there is no way I want to see coldplay RUSH a new album. It'll turn out shit, and that will be the end of them.

 

Take me back!!

Well I suppose they are trying to cater to the new wave of extremely short attention spanned teens that think they deserve the world handed to them on a plate. But I imagine such a practice would put a loootttt of stress on artists. It should be quality > quantity, not the other way around. Because otherwise nobody will listen to the acts because songs sound rushed and crap. Boooo @ this.

Guy Hands to Step Down as Terra Firma Chief Executive

 

Guy Hands will step down as chief executive officer of Terra Firma Capital Partners Ltd., seven years after he left Nomura Holdings Inc. to start the private equity firm.

 

Hands, 49, will remain chairman and chief investment officer, the London-based firm said in a statement today. Tim Pryce, 43, the firm’s lawyer, will replace Hands as CEO.

 

“Tim will be responsible for Terra Firma’s day-to-day operations,” Hands said in the statement. “I will concentrate on investments, investors and developing the business internationally.”

 

Terra Firma reported earlier this month a 1.39 billion-euro ($1.8 billion) loss for 2008 after writing down two investments, including its holding in EMI Group Ltd., the U.K. record label of Coldplay and Katy Perry.

 

An Oxford graduate who spent 12 years at Goldman Sachs Group Inc., Hands joined Nomura in 1994 after the Japanese firm agreed to finance his takeovers.

 

He built up Nomura’s buyout unit in the 1990s, helping Japan’s largest securities firm purchase 1,800 pubs from Grand Metropolitan Plc and Fosters Group Ltd., financed with bonds secured by lease payments on those properties.

 

He started his own firm with Nomura’s backing in 2002, and closed a 2.1 billion-euro fund in 2004. At Terra Firma, he acquired companies including Tank & Rast, a German highway services chain and U.K. gas provider East Surrey Holdings.

 

EMI Investment

 

Hands raised 5.4 billion euros for his latest fund in 2007, and invested about 30 percent of it in EMI, where he has tried to counteract a decline in CD sales caused by consumers downloading music from the Internet. Hands has changed EMI’s managers and is cutting costs to revive profit: EMI’s net loss in the six months ended Sept. 30 shrank by 52 percent to 155 million pounds, the company said in January.

 

Like other dealmakers, Hands has struggled to arrange acquisitions since the credit crisis cut off the debt financing that buyout firms rely on to fund their acquisitions. Blackstone Group LP, KKR & Co. and Candover Investments Plc have all announced writedowns of their assets in the past month as tumbling stock markets eroded the value of their investments.

 

“If current market conditions were to continue, the funds may not recover the full value of their 2007 investments,” Terra Firma said in its 2008 annual report. “We must be open and realistic about where the markets stand today.”

 

http://www.bloomberg.com/apps/news?pid=20601085&sid=alotiF89GXFQ&refer=europe

HAH! Take that. Didn't turn out too well for Mr Hands after all~

EMI Reports $2.4 Billion Loss

 

EMI Reports $2.4 Billion Loss

 

Needs $160 Million To Avoid Citi Loan Default. (UPDATED) It's official: EMI has reported a 2.4 Billion Loss. Accountants examining EMI's books...

 

... as part of a dispute between the label group, it's investment firm owner Terra Firma, and lender CitiGroup are expected to reveal that the company is $2.23 $2.4 billion in the red,

 

The red ink would put EMI in default of the terms of its massive $4.5 billion debt to Citi which is struggling under its own losses. To make matters worse, a $160 million loan payment is due on March 31st; and if that is missed, the bank may be forced to take control of the struggling company.

 

EMI's board is is said to be working feverishly on financing proposals to be presented to Terra Firma's investors. But at least 75% of them will have to vote in favor of putting up the extra cash. If not, there may be three majors left standing instead of four.

 

UPDATE "A breach of debt ratios, which are based on earnings before interest, taxes, depreciation and amortization, could result in Citigroup taking control of EMI, the people said. EMI reported Ebitda rose 82 percent to 298 million pounds for the year ended March 2009."

 

http://www.internetfinancialnews.com/financialblogtalk/news/ifn-6-20100205EMIReports24BillionLoss.html

 

EMI Records 'facing £1.5bn pre-tax debts'

 

EMI Records has cast doubts over the future of the company after reporting a pre-tax loss of £1.5bn. The 115-year-old label, which was bought by private equity firm Terra Firma for £4bn in 2007, is reportedly now looking for investors to inject a further £120m in order to stay afloat.

 

Should EMI fail to raise the money, lender Citigroup could seize control of the company as early as June, reports The Daily Telegraph. Saddled with the debt of Terra Firma's buyout, falling record sales as well as costly refinancing have stretched EMI to breaking point in recent years.

 

The label's restructuring measures also included axing 2,000 jobs in a bid to stem spiralling costs in 2008.

 

http://www.digitalspy.co.uk/music/news/a201701/emi-records-facing-gbp15bn-pre-tax-debts.html

 

Investors Reluctant to Invest More Money into EMI

 

Investors in financier Guy Hands’ Terra Firma private equity fund have pointed that they are reluctant to invest more money into his besieged music company EMI.

 

Lord Birt, the former BBC director-general who chairs EMI's parent company, admitted: "There is no certainty that such funds will be available."

 

EMI has announced a pre-tax loss for the year to March 2009 of £1.7 billion last week and its auditor KPMG expressed ‘significant doubt’ about its ability to continue proceed as a going concern as the company struggles with repayments to its lender, US bank Citigroup.

 

EMI had a long and prestigious pedigree in recorded music – founded in 1897, pioneering discs over cylinders and recruiting the stars of the day.

 

However, it reports that revenues had been witnessing a fall in five years when EMI and Time Warner initiated a tortuous two-year takeover attempt in 2007 and Hands chose to gear up his Terra Firma funds for an audacious bid.

 

The bank is expected to seize control of EMI if it is unable to make its repayments. Hands has posted to investors asking them to divulge a further £120 million into the group, subject to EMI producing a strategic plan for its future.

 

He seeks agreement from 75 per cent of the 150 investors concerned by June 15 to go ahead with his proposal.

 

http://topnews.co.uk/22424-investors-reluctant-invest-more-money-emi

EMI Music Considers Job Cuts to Reduce Costs, Telegraph Reports

 

Music group EMI is preparing further cost-cutting plans to persuade investors to pump £120 million into the business, it has been reported.

 

The group - which is owned by private equity company Terra Firma and counts Robbie Williams and Coldplay among its artists - posted a £1.75 billion loss for the year to March 2009 in accounts last week. Terra Firma took on huge debts in 2007 to buy the firm, but it is almost certain to breach lending terms without further investment - handing control to lender Citigroup.

 

EMI chief executive Elio Leoni-Sceti is drawing up plans to strip millions of pounds from the company's costs and rapidly grow the group's digital operations, according to the Sunday Telegraph. The music group cut more than 2,000 jobs in 2008 but a spokesman stressed "there are no current plans for redundancies".

 

Any jobs which go are likely to be through measures such as outsourcing, natural staff turnover and recruitment freezes, he added.

 

"The plan has not been written yet but when it is written it is likely to consist of a number of measures for revenue growth as well as continuing efficiencies," the spokesman said. According to the report, the ambitious plans involve growing digital music sales to 75% of total music sales within five years.

 

Terra Firma paid £4.2 billion for EMI in early 2007 before the credit crunch hit home. This has left the business laden with total liabilities of £3.8 billion as of the end of March last year. The huge loss came after more than £1.1 billion in one-off write-downs and restructuring charges, although EMI grew underlying profits during the year.

 

http://www.bloomberg.com/apps/news?pid=20601102&sid=aMNHuoPb0c7c

EMI crashes £1.75bn into the red

 

Coldplay's success is undermined by EMI's debts following private equity takeover.

 

EMI is the latest in a long line of businesses bought with junk-rated debt where the owners face pressure to surrender much or all of their investment to banks and other debt holders, according to private equity experts.

 

Terra Firma, the buyout owner behind the troubled music group home to Coldplay and Kylie Minogue, is asking fund investors to stump up an additional £105m to shore up this ill-fated business. Without this so-called "equity cure", buyout bosses will find themselves at the mercy of EMI's lending bank Citigroup — with whom they are already locked in bitter legal dispute.

 

Even if investors prove supportive, the cash injection is expected to buy EMI a grace period of about 12-months before tough decisions on restructuring the balance sheet have to be addressed.

 

High-profile woes for EMI come just weeks after another famous name, Manchester United, managed to refinance much of its debt through a £500m bond issue. Nigel Reynolds, a partner at Price­waterhouseCoopers and the author of a recent report on private equity-backed companies, said an increasing number of highly leveraged buyouts – typically deals done in 2006 and 2007 – will face debt repayment problems.

 

"With cheap, easy credit no longer available, the private equity model, based on high leverage and financial engineering, is no longer viable," said Reynolds. When deals were done in the boom years of 2006-2007, the funding agreements usually stipulated that the first major repayment – called a bullet repayment – would be made after five years. While private equity professionals were targeting a 3-5 year exit, that repayment was not a problem, but finding an exit is no longer straightforward, and hefty bullet repayments are looming.

 

"They now have to repay or ramp up their debt", said Reynolds, "and that depends on the banking market and on the success of IPOs [stock exchange flotations]. A lot of companies need to refinance, and that's why there is now a pipeline of possible IPOs: [companies] need to repay debt before it comes due." But bringing debt-laden companies to the stock market, he warned, will not be straightforward: "No-one wants to put up money to repay debt."

 

Fashion chain New Look – controlled by Apax Partners and Permira – could run into just such problems. The retailer, which plans a £1.7bn float, intends to raise £650m to pay down some of its £1bn debt. But New Look will still have a big debt – compared with none at rival fashion business Next.

 

PwC interviewed 12 private equity backed companies which had been bought out at the height of the boom in highly-leveraged deals. Most of them, it reports, "say the burden of the debt they are operating under has seriously restricted their ability to carry out their strategy" – but debt restructuring is not a realistic option. The companies said they had to grow their bottom line, even in the recession – because if they didn't they would breach their banking covenants.

 

One senior figure at a major buyout firm, who asked not to be named, echoed Reynolds findings suggesting many private equity owners would still have to hand over some or all of their investments eventually. Three private equity owners of gambling group Gala Coral – Permira, Candover and Cinven – are expected to formally lose control of the business next week, surrendering ownership to the companies mezzanine debt holders, including Apollo Management and Cerberus.

 

Other debt-financed buyouts to have seen their private equity-owners lose out include Countrywide, Britain's biggest residential estate agent, and house builder Crest Nicholson. Part of the reason why debt financing for private equity deals became so plentiful was because many banks found they could package up and sell on buyout loans within poorly understood financial packages known as collateralised debt obligations (CDOs). According to Bank of England ­figures about a third of loans used to finance private equity style deals in Europe are ultimately held though such packages. Optimists in the private equity world point to a substantial rally in the price of LBO debt. According to credit data firm Markit, senior five-year loans at Gala Coral, ­Manchester United, ­Formula One, New Look, and Alliance Boots was variously trading in the secondary market at between 50p and 65p in the pound a year ago. Today confidence has returned and this debt is trading between 92p and 100.5p.

 

http://www.guardian.co.uk/business/2010/feb/05/junk-debt-private-equity-problems

Time for Coldplay to go it alone and leave the Evil Music Institution behind.:rolleyes:

So EMI might be controlled by this Citigroup...

yes just like they were before Terra Firma took over. Except this time Citigroup will be serverly disadvantaged in finding a new buyer because the first time round they did not disclose to Terra Firma that another group had withdrawn their bid in 2008, leaving Terra Firma to over-price EMI when they bought them out for 4.2billion.

 

Coldplay label in doubt as EMI's woes are made public

 

A planned break-up and a 2 billion loss in value threatens the UK major label, EMI

 

A letter filed by the Citigroup bank in New York has revealed that Terra Firma, the company that bought EMI in 2007, now values its acquisition at 2 billion less than they paid for it. On the eve of the credit crunch, Terra Firma paid £4.2 billion for the record label that Robbie Williams, Lily Allen and Coldplay call home.

 

And according to various internet sources this morning, it is believed Guy Hands tried to break EMI up three months ago. That's according to the latest court documents in the legal battle between Citigroup and the Terra Firma chief. According to the Financial Times, Terra Firma now need to raise £120 million by June to stop EMI falling into the hands of Citigroup, the bank that lent it the money to complete the ill-fated deal.

 

Guy Hands hoped the break up would salvage his £4.2 bn investment in the label It was rejected by EMI's lender, but it's thought it could provide a blueprint to its future The battle between terra firmer and Citigroup launched at the starts of the year because Hands reckons he was duped into buying the label. Court documents filed Friday by Citigroup, include a letter Mr. Hands sent on November 5th to Citigroup executive Chad Leat proposing the separation and recapitalization of EMI's two businesses: the ailing recorded-music division, known as EMI Music, and the healthier EMI Music Publishing unit.

 

The behind-the-scenes tussle is another reminder of the extreme fragility of the world's No. 4 music business, the recording home of bands as big as Coldplay, following its leveraged buyout in 2007. It also speaks volumes of the lengths Mr. Hands is willing to go to salvage the investment. The battle between Guy Hands and Citigroup erupted at the start of this year when Guy Hands launched a lawsuit in a New York court. He reckons that Citigroup and it's most high-profile bankers had duped him into buying EMI, by falsely claiming there was a rival bidder.

 

Citigroup have launched a scathing attack on Guy Hands - a tax exile in Guernsey. It's claimed he pleaded to keep the trial out of the UK courts to protect his 'non-domiciled' tax status.

 

http://www.coldplaying.com/index.php?name=News&file=article&sid=6994

 

Citigroup says Guy Hands sought to break up EMI 'months ago'

 

Guy Hands tried to break up EMI three months ago, according to the latest court documents in the legal battle between Citigroup and the private equity chief over the purchase of the music group.

 

Mr Hands, chairman and chief executive of private equity Terra Firma, made the proposal in a letter to Citigroup's head of alternative asset group Chad Leat, according to a declaration by a Citigroup loan adviser filed with the US District Court in New York.

 

The demand comes in new documents filed in the US late on Friday as part of the legal battle between the two parties, which escalated this weekend after the bank demanded that the case be heard in London rather than New York.

 

In the papers Citigroup launched a scathing attack on Mr Hands e_SEnD a tax exile in Guernsey e_SEnD who had pleaded to keep the trial out of the UK courts to protect his "non-domiciled" tax status.

 

"Mr Hands's tax concerns appear to be overblown – but even if they were not, Mr Hands's tax status is irrelevant to the issues before this court," said Citigroup in its reply to Mr Hands' requests to have the case heard in New York.

 

"Forum shopping to avoid tax is not a legitimate basis on which to disregard either the parties' contractual choice of forum or this lawsuit's overwhelming centre of gravity in England."

 

In its submission to transfer the case to London, Citigroup details why Mr Hands' fears about returning to the UK based on being hit with a multi-million pound tax bill are "irrelevant".

 

The bank goes on to point out that EMI is based in the UK and that is where the takeover deal was done and where major witnesses continue to live.

 

The US investment bank even questions whether Mr Hands would indeed be liable for UK tax as he has claimed in his submissions to court.

 

In those documents Mr Hands wrote about his fears of returning to the UK. He said he had not visited his parents or his children – who remain living in the family home just outside London with his wife - since abandoning Britain last April.

 

He insisted that his home in Guernsey was not simply a convenience and that he would not accept dinner invitations or medical appointments in the UK or even fly through London airports on route to other destinations in case the Revenue and Customs department was able to make a tax claim against him.

 

In the latest legal fillings, Citigroup's top lending bankers, who were responsible for agreeing the £2.6bn debt Mr Hands needed to do the EMI deal in 2007, are critical about claims made by the private equity figure about his role in the deal and the version of events put forward by Terra Firma.

 

The US bank accuses Mr Hands of being "revisionist" about his employment status at Terra Firma, the private equity firm he founded and the same firm that - through its holding company Maltby Capital - bought EMI.

 

They include in their submissions a copy of Mr Hands' business card which states he is chief executive of Terra Firma, a company based in 2 More London Riverside. They also call attention to the website of Terra Firm capital partners where Mr Hands is named as the firm's chairman and chief investment officer.

 

"The revisionist history of relevant events in Terra Firma's opposition papers – in particular, Mr Hands's declaration – cannot shift the locus of this dispute from London to New York," say Citi.

 

The legal battle erupted at the start of this year when Mr Hands launched the lawsuit in a New York court claiming Citigroup and its most high profile bankers had duped him into buying EMI by claiming there was a rival bidder prepared to pay more. The claim is denied by the bank.

 

The £4.2bn deal was done on the eve of the credit crunch and the huge debt pile attached to the business has wreaked havoc on the home of recording stars Katy Pery, Coldplay and the Beatles.

 

Terra Firma has already had to inject £105m extra cash into the business to avoid breaching banking covenants. It is now in the process of putting together a proposal to its investors to get permission to inject an extra £120m into the company to avoid it falling into Citi's hands by the end of June.

 

http://www.telegraph.co.uk

Jeez, I'd be surprised if they actually do get together the money.