U.S. big player Citigroup Bank has taken the whole stake in UK iconic music company EMI in a deal that involves swapping debt for shares.
UK-EMI/CITIGROUP - U.S. bank Cititgroup has taken one hundred percent control of EMI.
The purchase 'price' for Citi taking over the British record label was that it covers the company's debt in exchange for all its equity.
EMI had been struggling since 2007 to pay off debts of 3.4 billion pounds borrowed from the bank.
The loan was taken out by Guy Hands' , the owner of Terra Firma the buyout group, when he took over the music company.
The deal means EMI can wipe around 2.2 billion pounds of debt off the slate.
A source familiar with the deal said it's unlikely Citi will hold on to EMI for long, although there seems no great rush to get rid of it quickly.
One eventual takeover suitor could be the U.S' Warner Music Group, which has held a number of talks with EMI over the last ten years.
EMI's CEO Roger Faxon said the money poured in by Citigroup will give the music company the most robust balance sheets in the industry.
Vice Chairman for Citigroup, Stephen Volk described EMI as an iconic business and said the bank is completely supportive of its management and its strategy.
EMI has contracts with artists such as Kate Perry and Iron Maiden and manages music catalogues by the Beatles and Kylie Minogue.
Ingrid Smith, Reuters