US bank Citigroup has taken control of the British music company EMI on the basis that its private equity owner would never be able to repay the four billion euros of debt it is carrying.
There has been a power struggle for EMI for several months. It has been suffocating under a burden of debt and has now defaulted.
Private equity group Terra Firma borrowed heavily from Citi in 2007 for a leveraged buyout.
There is speculation Citi may have a buyer for EMI which is home to artists such as Katy Perry, Iron Maiden, Kylie Minogue and the Beatles.
EMI said it would continue under its existing management despite the change of control.
“EMI is an iconic business and we are completely supportive of both its management and its strategy,” said Stephen Volk, vice chairman of Citi. “It is business as usual for everyone.”