Lex: EMI

EMI has just a few weeks to produce a new plan for its private equity owner to present to investors after the collapse of talks about a £200m ($304m) distribution deal left the company almost certain not to meet a key bank test of its financial health. An eleventh-hour attempt to sell distribution rights in the Americas to Vivendi’s Universal Music or Sony Music fell apart over concerns about price, timing and whether the sale could be blocked by Citigroup, which lent £3.2bn for Terra Firma’s £4.2bn buy-out of EMI in 2007. Luke Templeman analyses the music group's fate.