Citigroup grab EMI

The Terra Firma dream is over: Citi have seized control of EMI in lieu of unpaid debts.

Naturally, Citi are convinced it's the best thing all round:

Citi vice chairman Stephen Volk said EMI now had a strong balance sheet and "the ability to invest in and grow its business".

"This is a positive development for EMI, its employees, artists, songwriters and suppliers. EMI is an iconic business and we are completely supportive of both its management and its strategy," he added.

Wow. The one thing you can say about EMI is that it's been poorly managed and pursuing a rubbish strategy for the last few years - otherwise it wouldn't have defaulted on its loans and been taken over by Citi in the first place. It's a bit like someone trying to rescue a drowning man and saying that they'd like the drowner to continue with the flailing and vanishing under water.

The Citi takeover does relieve some of the debt Terra Firma larded onto EMI - now the company just owes £1.2bn instead of £3.4bn. That's good news - now EMI is just lumbering under an unimaginable debt instead of an unconscionable one.

Citi will be looking for a buyer. Good luck with that, Citi. For the time being, EMI will be run by bankers who don't understand it instead of by financial experts who don't understand it.

Terra Firma is still considering appealing against the findings of the New York court which said that Citi hadn't defrauded them when helping the EMI sale. If they do, that might make it harder for Citi to sell EMI on until that question is settled.