Citigroup Is EMI Music’s Latest Foster Parent

The heavily indebted music company EMI just moved in with Citigroup, its latest foster parent. Citigroup now owns EMI as part of an extended restructuring program. From DealBook:

The bank’s takeover of the record company had been widely expected, reports Ben Sisario on Media Decoder, as EMI has been struggling under a heavy debt load as a result of its $6.7 billion buyout in 2007 and amid a decline in music sales.

The buyout, by the British financier Guy Hands’s private equity firm Terra Firm, came at the height of the buyout boom. Citigroup provided some $4.3 billion in loans to finance the deal.

In a lawsuit, Mr. Hands sought to prove that a Citigroup banker had misled him during the auction of EMI. A federal jury in Manhattan sided with Citigroup. The court defeat made relinquishing EMI seem nearly inevitable.

Up next: an EMI sale to a music or media company. How about it, Apple?

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  • MusicLawyer

    EMI will more than likely be broken into pieces, or at least their recording and publishing divisions broken up. The takeover was a foregone conclusion for several months, and there have been plenty of discussions taking place regarding potential buyers, from Warner to BMG to a few old-school industry leaders backed by more venture capital.