EMI changes Hands
mainEMI has changed hands – apologies for pun – repossessed by the rotten bank.
Here’s the Reuters story.
Citibank will break up the label and sell it to whatever bidders can be found in a slumped market.
One of its bonus-bearing suits said: “This is a positive development for EMI, its employees, artists, songwriters and suppliers…”
Guy Hands has lost much of his personal fortune. Terra Firma is shaken.
Britain has lost its last powerhouse record label.
Moral of the story: the bank always wins.
Hands down: photo: telegraph.co.uk
EMI chief executive Roger Faxon said: “The recapitalisation of EMI by Citi is an extremely positive step for the company. With that solid footing, we are confident in our ability to drive our business forward.’
Here’s the full history on Bloomberg.
But why call the bank rotten? Is this really a bad thing? EMI is recapitalised (surely they’ve effectively done a debt-for-equity swap, which is how “the banks” in general should have sorted themselves out rather than tax-payer backed bailouts, but I digress – a D-f-E swap is in essence a very good way of sorting out the debt that saddled EMI), so EMI has less debt to service, making it a more viable company.
Citibank may well break up EMI, but only if that is likely to deliver best returns, which we can largely read as being best for the company. But in fact they said, I think I heard, that they weren’t intending breaking it up or selling it off piecemeal.
Would EMI have survived thus far were it not for Hands & Terra Firma pouring money at it?
Does Britain need a “powerhouse” record label? Does anyone? (the lack of decent profits at EMI certainly suggests that the music-loving public don’t need it, and plenty of artists making discs elsewhere suggests that the performers don’t need it either).
And as to “the bank always wins”, it doesn’t add up. Citigroup has lost $2.6 billion. That doesn’t sound like a win to me in any sense!