Pension fund hole adds to EMI's problems
The pension fund at EMI is in deficit to the tune of at least £115m, the music group has admitted, more than ten times the amount it previously suggested, presenting the heavily indebted company's private equity owners with a new cash crisis.
And the final amount of money needed to top up the fund could hit £217m, according to the company's annual report, out yesterday.
The pension deficit adds to financial problems at the company, which already needs hundreds of millions of pounds in cash infusions from its owners over the next four years if it is not to fall into the hands of its main lender, Citigroup. Stronger operating profits – thanks to big hit albums from the likes of Lady Antebellum and Katy Perry – are still not enough to prevent the company breaching its covenants, the report reiterated.
The Pensions Regulator failed to negotiate a deal between EMI and its pension trustees, so the matter has been passed to a formal determinations panel. EMI has dropped its argument that the deficit is only £10m, but will still argue that it is at the low end of the range.
Eric Champion, chairman of the EMI pensioners' association, said: "We think the regulator will be fair but the question that follows is whether the company will follow – or be able to follow – its ruling."
Terra Firma, the private equity group controlled by Guy Hands, acquired EMI in 2007. As well as offering the debt financing, Citigroup also ran the auction of the company, and Terra Firma is suing the bank, claiming it was misled during the auction process into paying over the odds for EMI. The two sides have scheduled arbitration proceedings in front of a US judge next month, in the hope of avoiding a courtroom showdown.
elephant appealPrince William signs up for our charity appeal
elephant appealSo says man jailed for cutting off dead elephant's tusks
booksWe examine the best titles for teens
scienceResearchers teach border collie to understand sentences using more than 1,000 words
booksA Christmas story in six parts
travelWill high-value tourism help the workshops of this Renaissance city?
Geoffrey Macnab does not like the comedian's big screen debut
Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
Ten best places to live in the UK: Hart in Hampshire takes top spot
'Untrue statements' anger over work to make H5N1 bird-flu virus MORE dangerous to humans
Paul Walker's daughter Meadow attends Justin Bieber Believe premiere
- 1 Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
- 2 French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
- 3 Sun will 'flip upside down' within weeks, says Nasa
- 4 The publisher who played with fire: the battle for control of Larsson's £30m legacy
- 5 Police seize possessions of rough sleepers in crackdown on homelessness
- < Previous
- Next >
iJobs Money & Business
£59999 - £80001 per annum + Benefits: Pro-Recruitment Group: A Top 10 firm in ...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Project Manage...
£60000 - £90000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£Negotiable: Citifocus: High calibre individual with institutional client serv...