Citigroup takes control of EMI

Investment bank Citigroup has seized control of record label EMI from beleaguered financier Guy Hands, it was announced today.

EMI - home to artists including Lily Allen and Robbie Williams - has seen its debt reduced from £3.4 billion to £1.2 billion under terms of the deal.

The music group had been bought by Mr Hands's private equity firm Terra Firma in 2007, with the buy-out group borrowing billions of pounds from Citi to finance the ill-fated takeover.

Terra Firma's £4.2 billion takeover of EMI is seen as being one of the worst-timed deals of the credit bubble, coming just before the crisis struck.

The deal left EMI, already struggling in a declining music market, saddled with crippling repayments on its £3 billion debt.

Mr Hands tried to sue Citi for up to £7 billion after accusing the bank of pretending that other bidders were interested to bump up the price, but lost the case.

Citigroup claimed Terra Firma's legal action was only brought in an attempt to reduce the debt it owes the bank following the acquisition.

EMI chief executive Roger Faxon said: "The recapitalisation of EMI by Citi is an extremely positive step for the company.

"With that solid footing, we are confident in our ability to drive our business forward.

"We have a clear vision for the future, a strong and committed management team, and now the right capital and financial structure in place to deliver successful outcomes for artists and songwriters."