EMI Losses £1.8bn, Citigroup Might Take Over Business

£1.8bn were lost by EMI, the music giant controlled by Guy Hands's Terra Firma, last year, leaving it in need of a £120m cash insertion to keep away the lender Citigroup from taking control of the business.

Maltby's auditor, said , "EMI's likely breach of lending terms with Citi and its £200m pension fund deficit amounted to material uncertainty that 'cast significant doubt on the group's ability to continue as a going concern'".

It alarms the British company not to exceed its forthcoming agreement allowing the Citi group to take over the control legally by end of June.

The accounts indicate, "The current forecasts for the group indicate that, absent of any equity cure, it is likely there will be a significant shortfall when the financial covenants under its banking facilities are tested as at March 31
2010".

Terra Firma's founder and chairman, Guy Hands, has written to investors asking them to introduce another £120m. Echoing the economic downturn, the group's £1.04bn impairment charge includes a £661m write-down in the value of the group's music catalogues and also a £135m restructuring cost.

By £279m in interest payments and £297m of foreign exchange losses on its borrowings, the bottom line was also punched.