EMI Likely to Dump Recording Division

The private equity group - Terra Firma - who purchased EMI in a bid to make it profitable again look set to dispose of the recording division of the company after posting continuingly disastrous accounts reports.

Although the company remain publicly committed to the recording division, it is an entirely separate entity from the company's far more lucrative publishing division and could be easily sold off if the need arose.

Since taking over EMI, Terra Firma have shed 1,500 jobs at the company and sought to eliminate bad business practices. As a side-effect of the takeover, the label has seen its fortunes dive further with an exodus of prominent artists such as Radiohead and Paul McCartney.

In October, the group posted losses of £757 million ($1.08 billion) for the year ending March 31st, 2008. In the first half of the 2008-09 tax year they took a hit of £155 million ($222.1 million) with a similarly critical report expected for the second half as well. Although Terra Firma are sealing the leaking ship somewhat, the lack of willing and able investors in the face of a recession is likely to limit the losses the equity group is willing to accumulate. The spectre of a repayment to Citigroup for finances relating to the acquisition is also looming, potentially one that the struggling company will not be able to make.