EMI Reports $2.4 Billion Loss. Needs $160 Million To Avoid Citi Loan Default
It's official. EMI has reported a 2.4 Billion Loss.
Accountants examining EMI's books as part of a dispute between the label group, it's investment firm owner Terra Firma, and lender CitiGroup are expected to reveal that the company is $2.23 $2.4 billion in the red,
The red ink would put EMI in default of the terms of its massive $4.5 billion debt to Citi which is struggling under its own losses. To make matters worse, a $160 million loan payment is due on March 31st; and if that is missed, the bank may be forced to take control of the struggling company.
EMI's board is is said to be working feverishly on financing proposals to be presented to Terra Firma's investors. But at least 75% of them will have to vote in favor of putting up the extra cash. If not, there may be three majors left standing instead of four.
UPDATE "A breach of debt ratios, which are based on earnings before interest, taxes, depreciation and amortization, could result in Citigroup taking control of EMI, the people said. EMI reported Ebitda rose 82 percent to 298 million pounds for the year ended March 2009." - Business Week
image via ars techinica