In a turn of events we’ve been speculating on for a year, EMI International’s owners Terra Firma have defaulted on its debts to bankers Citigroup, who have swiftly moved in to take over running the company and appointed administrators. Terra Firma’s cash borrowing company Maltby Investments Limited has had PriceWaterhouseCoopers appointed as administrators who have swiftly moved to recapitalize the company’s debt.
A press release says “Citi completed a recapitalization of the company. As a result, the company’s debt has been dramatically reduced by 65% from £3.4 billion to £1.2 billion, and the company has in excess of £300 million of cash available. The new capital structure provides EMI with the financial strength and flexibility to continue delivering on its strategy to maximise value for the artists and songwriters it is dedicated to serving.”
Naturally, most of this is bullshit. The administrators are most likely to sell off EMI’s profitable publishing division, while there’s some speculation that you might be able to buy the recorded music division for a slab of beer if you hang on in there. It’s the sad but inevitable demise of a record label that once upon a time was even admired by the artists on its roster, with the company’s then Manchester Square headquarters stairwell in London featuring on the cover of The Beatles’ Please Please Me.
It’s probably a bit early to speculate on what this means for the company’s Australian operations – as of last year, the company appeared insolvent without overseas parent company support. Let’s hope that EMI’s staffers in Australia don’t befall the fate of most companies with overseas parents being cut up in a fire sale – they often get the chop.
