EMI faces financial music but Irish arm is still in key
Published 12/03/2010 | 05:00
As record label EMI faces the possibility of losing iconic artists including Queen and Pink Floyd, its Irish arm has remained in key, posting a pre-tax profit of almost €4m here in the 12 months to the end of last March. That was down, however, on the €4.5m it made in the previous year.
In accounts just filed for the Irish unit, directors note that turnover fell by €1.5m to €16.4m due to a 21pc decline in 'physical' sales that include CDs, while digital sales rose 30pc.
The performance of the Irish division comes as Guy Hands' Terra Firma struggles to refinance a £3.2bn debt pile that threatens to sink the record label.
Guy Hands is the private equity owner of EMI.
EMI recorded a £1.7bn loss last year after impairments and interest payments.
Mr Hands has accused Citigroup, which owns EMI's debt, of artificially inflating the price of the record company before selling it to Terra Firma in 2007 for $4.2bn.
Terra Firma is suing Citigroup in a New York court.
Despite EMI having managed to boost its overall operating margins and revenue, the weight of debt is crippling the business. Its chief executive has just left after 18 months in the job, while Mr Hands has appointed a restructuring specialist to the board of Maltby, the company used to buy EMI.
Terra Firma has until June to raise a £120m (€132m) bandage from investors for EMI.
The money would be used to prevent EMI breaching covenants that would enable Citigroup to take control of the label.