It’s nearly crunch time for EMI: if the company fails the next test of its banking covenants, it may fall into the hands of co-investors Citigroup, who would be likely to put EMI up for sale. However, the Times claims that Terra Firma boss Guy Hands is mulling a plan to lease EMI’s North American catalogue to rival labels for five years for an estimated £400 million. “If Mr Hands could raise £400 million from leasing the rights, he could dip into the pot every time EMI was in danger of breaking a banking covenant,” explains the paper. However, there’s a suggestion that Citigroup could block the deal if it thinks it’s not in the interests of EMI’s stakeholders – i.e. itself. Source: Times Online
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