Whoa. As The New York Times reported like 20 damn minutes ago, giant banking company-thing Citigroup has just wrestled EMI (you know, that big old music company that was home to the Beatles and the Stones and Coldplay and Radiohead, etc. that has been crashing and burning spectacularly for some time now?) from the grip of Guy Hands, the awesomely quixotic leader of British private equity firm Terra Firma, who bought the debt-laden company back in 2007. See, Citigroup had lent Terra Firma some £2.7 billion (about $5.5 billion in 2007) to finance their acquisition of EMI. But, um, yeah. Then all that financial stuff that your dad’s always talking about happened, leaving Terra Firma unable to make debt payments on that loan.
Wasting no time after taking 100% ownership, Citi has promptly rolled-up its sleeves and reduced EMI’s debt by 65%, from £3.4 billion ($5.4 billion) down to an adorable little £1.2 billion (about $1.9 billion). The turnover will likely lead to a quick flip of EMI at Citi’s next yard sale, with rival music companies like the Warner Music Group and the new BMG Rights Management expected to be among the possible bidders. But EMI actually consists of several small parts (e.g., its recorded music division and its publishing division), and it’s currently unclear whether Citi will try to pass the company off as one unit or chop it into pieces first. For now, Citigroup is denying that it has been soliciting buyers, but don’t be surprised when you see Citigroup show up on the next episode of Pawn Stars.
And now, this:
• EMI: http://www.emimusic.com
• Citigroup: http://www.citigroup.com
