Terra Firma seeks EMI investors

Label is struggling with $4.2 bil of debt

British private equity group Terra Firma wants to bring in outside investors to help prop up EMI, which is struggling with £2.6 billion ($4.2 billion) of debt, the Observer newspaper reported.

The report said pension funds, insurance companies and foreign banks had been approached by Terra Firma amid fears EMI could default on interest repayments to Citigroup, which bankrolled the buyout of the music group in 2007.

Terra Firma on Friday accused Citigroup of fraud and sued the bank for billions in damages in connection with Terra Firma's purchase of EMI, court documents filed in New York showed.

Terra Firma accuses Citigroup of inflating the price it paid for EMI by failing to reveal that the only other bidder, Cerberus Capital Management, had withdrawn hours before an auction for EMI closed.