EMI looks at pawn option to raise cash

Mar 22 2010 by Peter McCusker, The Journal

MUSIC group EMI is said to be in talks to effectively pawn its back catalogue of music recordings as it battles to improve its finances.

The group is in discussions with rival music labels over managing its North American catalogue business, which includes tracks by the Beatles and Blondie, for a five-year period, according to reports.

It hopes to raise £400m from the deal, which would be enough to stop it breaching covenants on its £3.2bn debt, and prevent it being taken over by its lender, Citigroup.

The group needs to find £120m to deal with the covenant breach on its loans by mid-June.

EMI is understood to have started talks with Universal Music, while Sony and Warner Music are also thought to be in the frame.

The back catalogue contributes virtually all of the earnings at the company’s recorded music division.

No-one from EMI could be contacted to comment on the report in the Sunday Times.