Terra Firma, the private equity firm, is in the early stages of talks with Citigroup over a restructuring of EMI, the debt-laden UK music group.

A formal proposal has yet to be submitted but Guy Hands, head of Terra Firma, is offering to inject up to £300m of fresh equity in EMI, home to Katy Perry, the Beatles and Pink Floyd, while negotiating with Citigroup to write down a large chunk of EMI Music’s debt.