This may be remembered as one of the worst media investments of all time.
But playtime is over. As of Tuesday morning, Terra Firma has relinquished control of EMI to Citigroup. This is a 100 percent takeover, and part of a recapitalization that has slashed the debt burden by more than 65 percent to 1.2 billion pounds ($1.93 billion). A huge portion of the soured debt has effectively been written off.
At present, the EMI Group management structure will remain intact. But who knows about tomorrow.
Immediately following the news, EMI chief executive Roger Faxon offered this statement. “The recapitalization of EMI by Citi is an extremely positive step for the company,” Faxon relayed. “It has given us one of the most robust balance sheets in the industry with a modest level of debt and substantial liquidity. With that solid footing, we are confident in our ability to drive our business forward.”
Meanwhile, Guys Hands and Terra Capital are totally out of the picture. And, Maltby Capital – the investment vehicle that managed the EMI takeover – is in administration – or Brit-speak for bankruptcy.
So what’s next? Everyone is now focused on a possible sale, and speculation over the fate of the recording and publishing units will only ramp upward.