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🌙 COLDPLAY ANNOUNCE MOON MUSIC OUT OCTOBER 4TH 🎵
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    EMI's future in the balance as loans deadline looms

    emi.jpgThe future of Robbie Williams, Katy Perry and Coldplay record label EMI was on a knife-edge, as its private equity owner Terra Firma scrambled to meet a deadline today to raise around £120 million and avoid breaching banking covenants on £3 billion of loans. Sources suggested the chances were “about 50-50”.

     

    New EMI boss Charles Allen was trying to seal a $300 million (£200 million) deal which would allow the record label to “outsource” its sales catalogue of albums in North America. Allen was pinning hopes on bigger rival Universal Music which would take over responsibility for selling and marketing the sales catalogue. EMI has also been talking to Sony Music about the deal.

    Allies of EMI claimed “outsourcing” the catalogue would enable the label to cut overheads, increase profits and generate an upfront cash windfall, which would mean it avoids breaching its covenants with lender Citigroup.

     

    It is essential that EMI concludes the deal today so that the benefits can be included in the balance sheet of parent company Maltby Capital. Citigroup tests the covenants on the basis of EMI's profits relative to the size of its debt on 31 March. Maltby has already warned it is in danger of breaching covenants after recording a £1.75 billion pre-tax loss in February.

     

    If Maltby misses today's deadline or Citigroup blocks a deal, Terra Firma chief executive Guy Hands must ask his investors to inject the extra cash by 12 June or else the bank could seize control of the record label.

     

    Pictures of Coldplay at Estadio Universitario, Monterrey, Mexico (11th March 2010):

     

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    Photos by Galo González

     




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