EMI needs to make up for a funding gap of £100 million or it could face a potential seizure by Citigroup (NYSE: C) a creditor. It now appears that Sony (NYSE:SNE) is ready and willing to make a deal with EMI to win the distribution rights to the British music company’s back catalogue in the Americas, according to a report from the Guardian.
Discussion between Sony’s finance director, Kevin Kelleher, and EMI’s executive chairman, Charles Alen, could begin in may if advisors working for the two companies can come up with a broad outline of an agreement during the next few weeks.
The report comes after news last week that EMI failed to come up with an agreement with Universal that could have raised much needed funds to use as a deadline in June approaches when the company must repay 100 million GBP of the 3 billion GBP that it owes to Citigroup, the firm that provided funding for EMI’s acquisition by Hands just before the great recession.
Allen must now present Hands with a plan as to how EMI can raised additional funds from outsourcing agreements such as the Sony deal and from costing-cutting measures and asset sales before June 14th., the date that which Hands must have raised 120 million GBP from Terra Firma investors to meet the terms of the deals on its debt obligations to Citigroup.
Unless EMI can come up with cash to partially repay its debt to Citigroup, the New York-based investment bank will be well within its rights to seize control over EMI.
