Peter Kafka

Recent Posts by Peter Kafka

Saved! Terra Firma Keeps EMI Out of Citigroup’s Grasp (For Now).

Terra Firma, which made a disastrous bet on EMI Music a few years ago, gets a bit more time to try to salvage things.

Guy Hands’s private equity group has rounded up another $150 million from investors, which will allow it to avoid a looming default on debt held by Citigroup (C), the Wall Street Journal reports:

Mr. Hands’ success in tapping his investors hands him a victory in the latest round of his epic battle with Citi, which lent him the money to fund the leveraged buyout in 2007. With syndication markets closed as a result of the financial crisis, Citigroup was stuck holding more than £3 billion of EMI debt. The two sides have been unable to agree to a restructuring of the business, setting up a high stakes game of chicken.

The cash buys Mr. Hands nearly a year, to the end of next March, to execute on a turnaround plan for EMI, which has been buffeted by a shift in demand for music away from CD sales and the crippling debt the buyout saddled it with. Amid the problems, it has seen a number of big name artists flee the label, including Radiohead and Paul McCartney.

Bigger question: Does it really matter if one of the big music labels is owned by a private equity group instead of a bank? Maybe not. There’s still a good chance that EMI will end up getting broken into parts and sold off to rivals like Sony (SNE) and Warner Music Group (WMG).


Latest Video

View all videos »

Search »

The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald