The Daily Swarm

WSJ:

Concerns about EMI Group Ltd.‘s ongoing restructuring efforts prompted
Citigroup Inc. (C) executives to pull the music company’s debt from a sale that
the New York bank is planning, according to people familiar with the situation.

A group of banks including Citigroup last year loaned EMI about $4.9 billion
to finance its acquisition by London private-equity firm Terra Firma Capital
Partners Ltd. The banks intended to sell the loans to outside investors. But
when the credit crunch hit last summer, would-be buyers for relatively risky
corporate debt rapidly vanished. That left the banks holding the loans on their
own books. They’ve been desperately trying to find buyers, because the debt is
occupying valuable real estate on their overburdened balance sheets and its
diminished value is forcing the banks to record hefty write-downs.

Citigroup, which was holding about $43 billion of so-called leveraged loans at
the end of last year, this month set out to sell a big chunk of that to a group
of private-equity firms. The debt owed by EMI, the world’s fourth-largest
recorded-music company by sales, was originally on a list of loans Citigroup was
trying to sell.

But the financial services giant withdrew plans to sell the EMI loans – along
with seven other companies’ debt – because of concerns that it wouldn’t fetch a
“decent” price, says a person familiar with the matter. The concern was that
EMI‘s restructuring plan was likely to make prospective debt-buyers nervous.

FT:

EMI is now in the midst of a radical restructuring being undertaken by Guy Hands, Terra Firma’s chief executive, that will include as many as 2,000 job cuts. Its bankers remain unclear about its future business prospects and the financial results of that overhaul, a person close to the situation said.

There is also uncertainty because EMI is reviewing the way that it accounted for merchandise shipments to retailers in late 2007, according to people familiar with the matter.