EMI slumps to £1.75bn loss

Music group EMI says it has plunged to pre-tax losses of £1.75 billion after more than £1 billion in write-offs.

The huge loss in accounts posted by holding company Maltby Capital for the 12 months to March 31 2009 comes less than three years after EMI was bought by private equity firm Terra Firma.

EMI, whose artists include Robbie Williams and Coldplay, also racked up £136 million in costs from a group restructuring during the period.

The write-offs include a £661 million hit on the value of the back catalogues in its music publishing division.

Excluding the huge one-off charges however, EMI grew operating profits to £143 million from £101 million the previous year.

A spokesman said the firm had sold around 15 million remastered Beatles albums in recent months and its artists accounted for four of the current top ten US albums.

But the accounts also throw further light on the group's strained finances following the takeover in a "challenging" climate.

The group, which was loaded with total liabilities of £3.8 billion as of the end of March last year, said there was likely to be a "a significant shortfall" when its lending terms are tested at the end of March.

Reports suggest Terra Firma chief executive Guy Hands - who paid £4.2 billion for EMI - could have to raise around £100 million from investors - to avoid losing control of the bank to lender Citigroup.

Relations between Terra Firma and Citigroup have soured after Mr Hands' firm filed a lawsuit in Manhattan in December alleging that the US bank "misrepresented fundamental facts" when it brokered the sale of EMI two years ago.