Citigroup Inc. has seized control of EMI Group after the record label group failed to meet the loan terms used to finance its previous takeover by multimillionaire Guy Hands and his private equity firm, Terra Firma. The London-based EMI, a century-plus-old company, includes the labels Astralwerks, Blue Note, Capitol, Virgin Records, and of course, EMI Records among others.
Citigroup now owns all of EMI, according to Bloomberg’s Business Week , and in the debt-for-equity swap EMI’s debt decreased “by 65 percent to 1.2 billion pounds ($1.94 billion).”
The takeover may lead to a sale, now that the company’s crippling debt has been so considerably reduced. Warner Music Group and BMG may be floating some bids to be the new owners of the considerable catalog that EMI represents. Aside from current artists like the Beastie Boys, Coldplay, Gorillaz, and Norah Jones the group’s catalog includes legendary records like Bowie’s “Ziggy Stardust,” The Beatles “Revolver” and “Sgt. Pepper’s Lonely Heart’s Club Band,” Beach Boys’ “Pet Sounds,” Miles Davis’ ”Birth Of The Cool,” Pink Floyd’s “Dark Side Of The Moon,” Radiohead’s “OK Computer” and Frank Sinatra’s “Songs For Swingin’ Lovers.”
Such a colossal record collection has not given EMI an edge against digital downloads and rampant file sharing/piracy though, and the company struggled to survive the past several years. Mr. Hands, the financier extraordinaire, who is attributed with saying that securitisation (re-selling contractual debts like mortgages and auto loans to investors who then earn interest on the payments) “is the crack cocaine of the financial services industry,” sued Citigroup last year alleging that the bank had tricked him into buying EMI — but that didn’t stop him from trying to hold onto the high profile company for which he paid $6.5 billion for in 2007, just before the global credit crisis annihilated his investment.