Hands’ Terra Firma in talks over refinancing EMI’s debt
GUY Hands’ private equity firm Terra Firma is negotiating with Citigroup about the refinancing of debt-riddled music label EMI Group.
EMI chairman Hands is proposing that he invest an additional £250m to £300m into the business, in return for new financial agreements and the write-off of £500m of EMI’s recorded music division’s debt-pile.
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.
Negotiations will not be made any easier by Hands’ recent vow that he will not set foot in the UK for two years – as he protests against the ambiguity around the government’s 90-day tax rule – which means all his official business must be conducted from his office in Guernsey.
Citi was left holding the entire debt package associated with Terra Firma’s £4bn takeover in September 2007. Terra Firma pumped £28m into EMI in May, its second injection of capital in six months, to keep the company within the terms of its debt agreements.