NEW YORK: Citgroup, the international financial conglomerate, on Tuesday acquired EMI Group Ltd and reduced the music company's debt by 65 percent.
Citigroup acquired 100 percent of EMI's share capital. Following the acquisition, the financial institution completed a successful recapitalization of the company to provide it with financial strength and flexibility.
In addition, EMI's debt was dramatically reduced by 65 percent from $5.48 billion (£3.4 billion) to $1.9 billion ( £1.2 billion). As a result, the music company has in excess of $484 million (£300 million) of cash available.
"The recapitalization of EMI by Citi is an extremely positive step for the company," said EMI's CEO Roger Faxon. "It has given us one of the most robust balance sheets in the industry with a modest level of debt and substantial liquidity."
The recapitalization consisted in a debt-for-equity swap by Citigroup. EMI was sold along its holding company Maltby Acquisitions Limited by the newly appointed administrators Maltby Investments Limited, Peter Spratt and Tony Lomas.
"We have already made great progress in meeting the challenges facing our industry. The closer alliance between our two operating divisions is already delivering impressive results on behalf of the creative talent we are privileged to represent," Faxon added.
EMI will continue under the same management but will be completely separated to Maltby Investments, which remains in administration.
"This is a positive development for EMI, its employees, artists, songwriters and suppliers. Our objective is to have EMI perform its absolute best for our shareholders over time," said Stephen Volk, Vice Chairman of Citigroup and new Chairman of Maltby Acquisitions.
(BNO NEWS )