Citigroup lining up EMI buyers

Private equity firms approached, U.K. paper reports

LONDON -- Citigroup is lining up potential buyers for EMI, according to the Observer.

The U.K. paper reports that the bank has approached private equity firms in the U.S. and Sweden, as well as Warner Music over purchasing the group.

EMI owner Terra Firma is suing Citigroup in the U.S., claiming the bank falsely stated there were other bidders for the major at the time of the sale in 2007.

The move by Citigroup is said to be in response to concerns that Terra Firma could breach its debt covenants at the end of December, though the private equity firm has reportedly injected equity on four previous occasions to prevent any such breach.

Meanwhile, the Financial Times reports that Terra Firma says that, amid its current dispute with Citigroup, it has not been "appropriate" to publish its usual annual review of Maltby Capital, its investment vehicle for EMI.