Hands' Terra Firma in talks over refinancing EMI's debt

GUY Hands&rsquo; private equity firm Terra Firma is negotiating with Citigroup about the refinancing of debt-riddled music label EMI Group.<br /><br />EMI chairman Hands is proposing that he invest an additional &pound;250m&nbsp; to &pound;300m into the business, in return for new financial agreements and the write-off of &pound;500m of EMI&rsquo;s recorded music division&rsquo;s debt-pile.<br /><br />Hands believes that his proposal is a long-term solution for EMI and would put the company on a firmer financial footing, as well as giving Citi a better chance of syndicating the debt, which Terra Firma does not need to pay back until 2015.<br /><br />Negotiations will not be made any easier by Hands&rsquo; recent vow that he will not set foot in the UK for two years &ndash; as he protests against the ambiguity around the government&rsquo;s 90-day tax rule &ndash; which means all his official business must be conducted from his office in Guernsey.<br /><br />Citi was left holding the entire debt package associated with Terra Firma&rsquo;s &pound;4bn takeover in September 2007. Terra Firma pumped &pound;28m into EMI in May, its second injection of capital in six months, to keep the company within the terms of its debt agreements.