Citigroup Seizes EMI, Looks For Buyer

Citigroup's 399 Park Avenue and EMI's 150 Fifth Avenue, via PropertyShark

As the month turned over, Citigroup wasted no time in taking control of EMI. The move came as a surprise to former owner Terra Firma, which was expecting to default on its debt before ceding control to the bank. During the takeover, Citi wrote off $3.5 billion of EMI's debt, leaving it with $1.9 billion, but the improved balance sheet is unlikely to change the label's next step: being sold to the highest bidder. NPR compares the label to a house burdened by a subprime mortgage.

As far as potential buyers, Warner has been seen as the frontrunner, even as it considers selling its publishing division, which could, in turn, finance a bid for EMI's back catalog, the most lucrative part of the label. Another contender is BMG Rights Management, a partnership of Bertelsmann and Kohlberg Kravis Roberts & Co. L.P. (KKR), which has considered buying before.

Either way, the future of the EMI looks precarious.